American Economic Review: Vol. 103 No. 3 (May 2013)


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Place Based Policies with Unemployment

Article Citation

Kline, Patrick, and Enrico Moretti. 2013. "Place Based Policies with Unemployment." American Economic Review, 103(3): 238-43.

DOI: 10.1257/aer.103.3.238


We develop a stylized model of frictional local labor markets with the goal of studying the efficiency of unemployment differences across areas. The model adapts the widely used Diamond-Mortensen-Pissarides framework to a local labor market setting with a competitive housing market. The result is a simple search analogue of the classic Roback model that provides a tractable environment for studying the effects of local job creation efforts.

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Kline, Patrick (U CA, Berkeley)
Moretti, Enrico (U CA, Berkeley)

JEL Classifications

E24: Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
R12: Size and Spatial Distributions of Regional Economic Activity
R23: Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics

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