RIEB Discussion Paper Series No.2020-26

RIEB Discussion Paper Series No.2020-26


Urbanization Effects on Job Search Decision


This paper examines the effect of industrial agglomeration on a non-working individual's decision to search for a job. The theory implies that agglomeration reduces search costs, enabling non-working individuals to search for jobs. The empirical analyses, using Japanese microdata, find that agglomeration raises the probability of searching for a job, supporting the theoretical prediction. Furthermore, this effect is significant only for females who are less educated, middle-aged and older, and married without children. Such groups tend to benefit from agglomeration because they have relatively higher potential search costs than do other groups.


Agglomeration; Local labor market; Labor force participation; Heterogenous individual

JEL Classification

J64, R11, R23


Graduate School of Humanities and Social Sciences, Okayama University
3-1-1, Tsushima-naka, Kita-ku, Okayama 700-8530, Japan
Junior Research Fellow, RIEB, Kobe University