![Efficiency wages and unemployment in cities: The case of high-relocation costs [An article from: Regional Science and Urban Economics]](http://ecx.images-amazon.com/images/I/51TYNEN3JFL._SL500_AA240_.jpg)
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This digital document is a journal article from Regional Science and Urban Economics, published by Elsevier in . The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
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We develop an urban model in which all jobs are located in the Central Business District (CBD) and workers, who have high relocation costs, optimally choose their residence between the CBD and the city fringe. We consider two information structures. In the first case, firms perfectly observe the residential location of all workers, while, in the second one, firms do not observe where workers live. In the perfect information equilibrium, we show that the efficiency wage is increasing with distance to jobs. We also demonstrate that workers are better off and landlords worse off under the perfect information equilibrium.
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