Urban Labor and Housing Markets


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.


  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



Albouy, D. (2008). Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas. NBERWorking Papers 14472, National Bureau of Economic Research, Inc.
Amior, M. & Manning, A. (2018). The persistence of local joblessness. American Economic Review, 108(7), 1942–70.
Aslund, O., Ôsth, J., & Zenou, Y. (2010). How important is access to jobs? old question–improved answer. Journal of Economic Geography, 10(3), 389–422.
Bayer, P., McMillan, R., Murphy, A., & Timmins, C. (2016). A Dynamic Model of Demand for Houses and Neighborhoods. Econometrica, 84, 893–942.
Boitier, V. (2016). The role of labor market structure in urban sprawl. GAINS Discussion Papers 0190, Gains.
Brueckner, J. K., Thisse, J.-F., & Zenou, Y. (1999). Why is central paris rich and downtown detroit poor? : An amenity-based theory. European Economic Review, 43(1), 91–107.
Carrillo, P. E. (2012). An empirical stationary equilibrium search model of the housing market. International Economic Review, 53(1), 203–234.
Combes, P.-P., Duranton, G., & Gobillon, L. (2018). The cost of agglomeration: Land prices in cities. Sciences Po publications info:hdl:2441/6bmhhi42888, Sciences Po.
Combes, P.-P., Schmutz, B., Decreuse, B., & Trannoy, A. (2016). Neighbor Discrimination Theory and evidence from the French rental market. Working Papers 2016-36, Center for Research in Economics and Statistics.
Decreuse, B. & van Ypersele, T. (2011). Housing market regulation and the social demand for job protection. Journal of Public Economics, 95(11), 1397–1409.
Fujita, M. (1989). Urban Economic Theory. Number 9780521346627 in Cambridge Books. Cambridge University Press.
Glaeser, E. L. & Kahn, M. E. (2004). Sprawl and urban growth. In J. V. Henderson & J. F. Thisse (Eds.), Handbook of Regional and Urban Economics, volume 4 of Handbook of Regional and Urban Economics chapter 56, (pp. 2481–2527). Elsevier.
Gobillon, L.,Magnac, T., & Selod, H. (2011). The effect of location on finding a job in the paris region. Journal of Applied Econometrics, 26(7), 1079–1112.
Guglielminetti, E., Lalive, R., Ruh, P., &Wasmer, E. (2015). Spatial search strategies of job seekers and the role of unemployment insurance. Sciences po publications, Sciences Po.
Haller, P. & Heuermann, D. F. (2016). Job search and hiring in local labor markets: Evidence on spillovers in regional matching functions. Regional Science and Urban Economics, 60, 125–138.
Han, L. & Strange, W. (2015). The microstructure of housing markets. volume 5 chapter Chapter 13, (pp. 813–886). Elsevier.
Head, A. & Lloyd-Ellis, H. (2012). Housing Liquidity, Mobility, and the Labour Market. Review of Economic Studies, 79(4), 1559–1589.
Head, A., Lloyd-Ellis, H., & Sun, H. (2014). Search, liquidity, and the dynamics of house prices and construction. American Economic Review, 104(4), 1172–1210.
Hellerstein, J. K., Neumark, D., &McInerney, M. (2008). Spatial mismatch or racial mismatch? Journal of Urban Economics, 64(2), 464–479.
Hubert, F. (2006). The Blackwell Companion to Urban Economics, chapter The economic theory of housing tenure choice, (pp. 145–158). Blackwell.
Karahan, F. & Rhee, S. (2013). Geographical reallocation and unemployment during the great recession: the role of the housing bust. Staff Reports 605, Federal Reserve Bank of New York.
Kennan, J. & Walker, J. R. (2011). The effect of expected income on individual migration decisions. Econometrica, 79(1), 211–251.
Kline, P. & Moretti, E. (2014). People, places, and public policy: Some simple welfare economics of local economic development programs. Annual Review of Economics, 6(1), 629–662.
Koster, H. R. & van Ommeren, J. (2017). Place-based policies and the housing market. Tinbergen Institute Discussion Papers 17-008/VIII, Tinbergen Institute.
Laferrère, A. & LeBlanc, D. (2006). The Blackwell Companion to Urban Economics, chapter Housing Policy: Low-Income Households in France, (pp. 159–178). Blackwell. 
Manning, A. & Petrongolo, B. (2017). How local are labormarkets? evidence from a spatial job search model. American Economic Review, 107(10), 2877–2907. 
Munch, J. R., Rosholm,M., & Svarer,M. (2008). Home ownership, job duration, and wages. Journal of Urban Economics, 63(1), 130–145.
Olsen, E. & Zabel, J. (2015). Us housing policy. volume 5 chapter Chapter 14, (pp. 887–986). Elsevier.
Ouazad, A. (2015). Blockbusting: Brokers and the dynamics of segregation. Journal of Economic Theory, 157(C), 811–841.
Patacchini, E. & Zenou, Y. (2007). Spatial dependence in local unemployment rates. Journal of Economic Geography, 7(2), 169–191.
Phillips, D. C. (2014). Getting to work: Experimental evidence on job search and transportation costs. Labour Economics, 29(C), 72–82.
Piazzesi, M., Schneider, M., & Stroebel, J. (2015). Segmented Housing Search. NBER Working Papers 20823, National Bureau of Economic Research, Inc.
Pissarides, C. A. (2000). EquilibriumUnemployment Theory, 2nd Edition, volume 1 of MIT Press Books. The MIT Press.
Roback, J. (1982). Wages, Rents, and the Quality of Life. Journal of Political Economy, 90(6), 1257–78. 
Rosenthal, S. & Ross, S. (2015). Change and persistence in the economic status of neighborhoods and cities. volume 5 chapter Chapter 16, (pp. 1047–1120). Elsevier.
Ruppert, P., Stancanelli, E., &Wasmer, E. (2009). Commuting, wages and bargaining power. Annals of Economics and Statistics, (95-96), 201–220.
Schmutz, B. & Sidibé, M. (2017). Frictional labormobility. Working Papers 48, CREST.
Schwartz, A. (1973). Interpreting the Effect of Distance on Migration. Journal of Political Economy, 81(5), 1153–69.
Wrede, M. (2015). Wages, rents, unemployment, and the quality of life: a consistent theory-based measure. Journal of Regional Science, 4(55), 609–625.
Zenou, Y. (2009). Urban Labor Economics. Number 9780521875387 in Cambridge Books. Cambridge University Press.
Zenou, Y. (2013). Spatial versus social mismatch. Journal of Urban Economics, 74(C), 113–132.