Spatial mismatch in search equilibrium

We construct a search equilibrium model for a city with central and suburba n labor markets that is consistent with the set of empirical regularities c ommonly associated with the spatial mismatch hypothesis: a higher rate of u nemployment for central city residents than suburban residents, a higher jo b vacancy rate for suburban firms, and reverse commuting and higher suburba n wages. The effectiveness and welfare implications of public policy progra ms that might be used to remedy the underlying mismatch are examined.