This paper illustrates the effect of employment in the tradable sector on employment in the non-tradable sector in the same city with a simple model. The model predicts a significant positive local employment multiplier that increases in size with the unemployment rate. It also predicts that the...

By explicitly considering the spatial dimension of local regional labor markets, we develop a simple dynamic model that explains the spatial correlation between unemployment rates. We then test this model by using UK local data. Our evidence shows a significant spatial dependence that has been...