How Do Firms Redline Workers?

By Yves Zenou. Social Science Research Network, 2002

114 citations recorded by the source corpus.

In a city where individuals endogenously choose their residential location, firms determine their spatial efficiency wage and a geographical red line beyond which they do not recruit workers. This is because workers experiencing longer commuting trips provide lower effort levels than those residing closer to jobs. By solving simultaneously for the land and labour market equilibrium, we show that there exists a unique market equilibrium that determines the location of all individuals in the city, the land rent, the efficiency wage, the recruitment area and the unemployment level in the economy. This model is able to provide a new mechanism for the spatial mismatch hypothesis by taking the firm’s viewpoint. Distance to jobs is harmful not because workers have low information about jobs (search) or because commuting costs are too high but because firms do not hire remote workers.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/81ac0afa491afac397a581b07b087d40d7022afb

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Citations in the corpus

Residential Segregation and Unemployment: The Case of Brussels (2008, background): “Finally, firms could discriminate against distant workers, for instance if distance makes them less productive because of long and tiring commutes (as in Zenou, 2002).”
Can Tax Breaks Beat Geography? Lessons from the French Enterprise Zone Experience (2012, background): “…spatial isolation of deprived urban neighborhoods, and its corollary regarding the low mobility of their residents, are major obstacles to the successful integration of these populations (see, among dozens of others, Coulson, Laing, and Wang (2001), Zenou (2002) or Patacchini and Zenou (2007)).”
How Important is Access to Jobs? Old Question - Improved Answer (2010, unknown): “If this is true, then firms may draw a red line beyond which they will not hire workers (Wilson, 1996, Zenou, 2002,).”
Are workers with a long commute less productive? An empirical analysis of absenteeism (2011, background): “In particular, Zenou (2002) assumes that workers involuntarily provide less work effort due to larger commutes.”