Job Search in Thick Markets : Evidence from Italy

I analyze empirically the effects of both urban and industrial agglomeration on men's and women's search behavior and on the efficiency of matching. The analysis is based on a unique panel data set from the Italian Labor Force Survey micro-data, which covers 520 randomly drawn Local Labor Market Areas (66 percent of the total) over the four quarters of 2002. I compute transition probabilities from non-employment to employment by jointly estimating the probability of searching and the probability of finding a job conditional on having searched, and I test whether these are affected by urbanization and/or industry localization. The main results indicate that both urbanization and industry localization raise job seekers' chances of finding employment (conditional on having searched), but neither of them affects non-employed individuals' search behavior