This book studies the links between urban economics and labor economics. Different models of urban labor economic theory are examined in the initial two parts of this book: first urban search-matching models and then urban efficiency wages. These models are then used to analyze urban ghettos and their consequences for ethnic minorities in the labor market. Professor Zenou first provides different mechanisms for the so-called spatial mismatch hypothesis, which postulates that housing discrimination introduces a key frictional factor that prevents minorities from improving access to job opportunities by relocating their residences closer to jobs. He then explores social networks, which tend to be affected by spatial factors, as workers who are physically close to jobs can be socially far away from them. Based on these models, the author offers different policies aiming at fighting high unemployment rates experienced by ethnic minorities residing in segregated areas.

'In the field of urban economics, this is exactly the kind of book that I have been waiting for. Based on his persistent research work over the past twenty years, Zenou has done a great job of presenting a unified theory of urban labor economics, in which land markets and labor markets are linked in an integrated manner. After introducing the main theoretical ingredients systematically, the book addresses major policy issues, such as urban unemployment, ghettos, labor market networks, and spatial mismatches between minorities’ residences and job locations. This book is a must for both urban economists and labor economists interested in cities as well as for urban policy makers.'

Masahisa Fujita - Institute of Economic Research, Kyoto University (KIER), Japan

'Economists have begun to unravel how geography and the labor market interact to influence the extent of urban poverty and race discrimination. In this book Yves Zenou, a leader in the field, reviews and unites the literature in a way that is accessible to advanced students and useful to specialists.'

Kevin Lang - Boston University

'The modern theory of labour markets and the modern theory of urban economics grew independently from each other but the parallels are obvious. Search and matching theory is about bringing disparate jobs and workers together to form productive matches. Urban economics is about the location of economic activity and residential housing. In recent years, Yves Zenou has been one of the pioneer match-makers for the two strands of theory. In this book he patiently develops the key ideas in each theory and shows how a rich equilibrium is obtained with explicit land use and labour frictions. It should be a standard reference both for labour economists wanting to bring land as a scarce factor in their models and for urban economists wanting to learn about the implications of search and matching frictions or efficiency wages for land use.'

Christopher Pissarides - London School of Economics

'Yves Zenou provides a lucid theoretical analysis of wage and employment determination in cities. Up to date and comprehensive in its coverage; a brilliant achievement.'

Yoram Weiss - Tel-Aviv University, Israel