Infrastructure and especially mass transit play a major role in urban economics and are the centre of many research questions. Probably due to simultaneous determination of infrastructure supply and demand most research is only carried out on the supply side driven relationship explaining how...

We develop a model of a city populated by heterogeneous agents. Agents self-select into entrepreneurship, and entrepreneurs set up firms which hire workers. We characterize the equilibrium matching between firms and workers, as well as the within-city assignment of agents to locations. We then...