Urban Labor and Housing Markets


Objectif

This course is an introduction to the modeling of urban labor and housing markets, with an emphasis on dynamic models. Building upon urban economic theory and the search and matching framework, we will first study the interplay between city structure and job search behavior, introduce the notion of spatialmismatch and discuss the relevance of so-called "place-based" policies. Then, we will turn to the housing market and the specific sequence of home search, study the determinants of housing demand and analyze the processes leading to urban segregation. The last part will be devoted to the question of labor mobility between cities. We will question the impact of tenure status on labor market performance, discuss what constitutes a local labor market and analyze the determinants and consequences of job-related migration.

 

Evaluation :  Attendance is compulsory. Any unexcused absence will impact final grade. Students will be evaluated on the following items:

  1. a 5-page max summary of the course to turn in with the exam (20%);
  2. a note-free (except for your own summary) in-class examon a few short problems and a short-essay question (50%);
  3. a 2-page max note of intent regarding the extension of one of the papers discussed in class: how should the model be augmented? what would be the data requirements and the empirical strategy? (30%).

Both items (1) and (3) may be coauthored with one other student.

Plan

  1. Job search in the city
    1. Urban economic theory and the urban job search model
    2. Extensions: spatial constraints on search efficiency, relocation costs and polycentric cities
    3. The spatial mismatch hypothesis and other urban controversies
  2. Dynamic models of the housing market
    1. (Why) is housing different? Housing market and housing search
    2. Segregation, failures of the housing market and housing policies
    3. Constraints: occupancy status, mobility costs and information
    4. Definition of local labor markets and frictional spatial equilibrium
  3. Review and practice problems

 

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Bayer, P., McMillan, R., Murphy, A., & Timmins, C. (2016). A Dynamic Model of Demand for Houses and Neighborhoods. Econometrica, 84, 893–942.
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