This paper shows that we can normalize job and worker characteristics so that, without frictions, there exists a linear relationship between wages on the one hand and worker and job type indices on the other. However, for five European countries and the United States we find strong evidence for...

We derive a structural index for labor market density based on the Ellison-Glaeser index for industry concentration. The labor market density index serves as a proxy for the number of workers that are potentially available for jobs in a particular area. The index is based on observed home-work...

This paper describes a search model with a continuum of worker and job types, transferable utility and an IRS contact technology. We apply a second order Taylor expansion to derive an analytical solution of the equilibrium. We find that one third of the increasing returns in contacts are...

Do people move to cities because of marriage market considerations? In cities

See 'On-The-Job Search, Mismatch and Efficiency', forthcoming in the 'Review of Economic Studies'.

This paper develops and tests a model where cities play an important role as marriage markets. The idea is simple. Cities are dense areas where singles can meet more potential partners than in rural areas. To enjoy those benefits, they are willing to pay a premium in terms of higher housing...

Divorce rates are higher in cities. Based on Danish register data, this paper shows that of the marriages formed in the city, those couples who remain in the city have a 23% higher divorce rate than those who move out. In this paper, we test whether this observation is due to sorting of more...

This paper characterizes the equilibrium for a large class of search models with two-sided heterogeneity and on-the-job search. Besides the well-known congestion externalities, we show that on-the-job search in combination with monopsonistic wage setting without commitment creates a...

We analyze a general search model with on-the-job search and sorting of heterogeneous workers into heterogeneous jobs. This model yields a simple relationship between (i) the unemployment rate, (ii) the value of non-market time, and (iii) the max-mean wage differential. The latter measure of...