Urban Spatial Structure, Employment and Social Ties

Workers residing farther away from the job center tend to search less for a job and are less likely to be employed.

Professor Pierre Picard (University of Luxembourg) presented an economical model he developed with Professor Yves Zenou (Stockholm University) which demonstrates how workers choose both their residential location (geographical space) and social interactions (social space). In equilibrium, they show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the two populations are ex ante totally identical, they find that the majority group experiences a lower unemployment rate than the minority group and tends to socially interact more with other workers of its own group. Within each group, they demonstrate that workers residing farther away from the job center tend to search less for a job and are less likely to be employed. This model is thus able to explain why ethnic minorities are segregated in the outer urban and social space and why this leads to adverse labour market outcomes in the absence of any discrimination against the minority group.

Professor Pierre Picard graduated as a civil engineer at the University of Louvain. After working some years in the telecom industry, he obtained a M.B.A. at the Katholiek Universiteit van Leuven (1994) and completed a Ph.D. in Management Science and Economics at the University of Louvain (1998). Since then he teached Micro-economics Industrial Organization, Spatial Economics and Managerial Economics at the Economics Department of the University of Manchester. He is now professor at the University of Luxembourg and teaching Industrial Organization, Regional Economics and Public Economics.

Pierre M. Picard is interested in topics linking the fields of public economics, industrial organization, spatial and regional economics and economic geography. His research includes theoretical works about the following issues: privatization, information technologies, spatial interactions and city formation, firms’ agglomeration, international trade, fiscal federalism, etc.