This paper compares two theories of involuntary unemployment: the efficiency-wage theory and the insider …-outsider theory. We indicate that one of the central problems in providing microfoundations for the existence of involuntary … unemployment is to explain why there is no underbidding, and we compare the two theories in this contex. …

The aim of this paper is to analyse the effects of suburban housing discrimination on the wages and unemployment rates … discrimination, they face a higher unemployment rate in the central city than in the suburbs, also earning lower wages in the centre …: unemployment in the labour market. In doing so, the paper provides new insight into the spatial mismatch hypothesis. …

We study the role of unemployment in the context of the endogeneous formation of a monocentric city in which firms set …' between location and jobs because the further away from jobs the unemployed, the larger the level of unemployment. Finally, we … commuting costs of all workers) reduces urban unemployment, increasing utilities of all workers but also raising inequality …

The Todaro Paradox states that policies aimed at reducing urban unemployment are bound to backfire: they will raise … rather than reduce urban unemployment. The aim of this paper is to re-examine this paradox in the context of efficiency wage … and search-matching models. For that, we study a policy that consists in decreasing the urban unemployment benefit. In an …