A two-sector model of urban unemployment is developed which focuses on the formation of a secondary sector under conditions in which a demand shock in the primary sector leads to a sharp increase in unemployment. The optimal location in the secondary sector (treated as a single firm) is shown to...

This paper proposes a model where employers have two types of prejudices: racial and spatial discrimination. Because of the first one, black workers have less chance than white workers to find a job. Because of the second one, workers living closer to the city-center have less chances than...

We study the role of unemployment in the context of the endogeneous formation of a monocentric city in which firms set efficiency wages to deter shirking. We first show that, in equilibrium, the employed locate at the vicinity of the city-center, the unemployed reside at the city-edge and firms...