Zenou, Yves - Institute for the Study of Labor (IZA) - 2008
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JEL Classification: D83, J64, R14
Keywords: diamond paradox, urban land-use, spatial compensation, search frictions … spatial compensation is calculated at x = L = N
³
sa
U
δ+sa
U
´
,
i.e. when the land rent of employed and unemployed workers …, increasing s reduces the spatial compensation since the spatial cost difference between
employed and unemployed workers is smaller …