演講摘要 : In this paper, we construct a search equilibrium model in which heterogeneous workers sort themselves into rural and urban areas according to their abilities. We find that a worker tends to search for employment in a city where his ability is close to the average ability of workers in the city. Thus a worker with high ability goes a more productive city because of high wage rate; meanwhile, he also takes the risk of being unemployed because the labor market is not tight. In a steady-state equilibrium, cities with higher productivity are larger than those with lower productivity. The wage gap between urban and rural areas is increasing with the city size. This confirms recent finding in empirical study. We show that the number of cities is endogenous and that the steady state equilibrium is unique and is a social optimum. With the consideration of heterogeneous firms with different job requirements, the resulting equilibrium is different from the original, but the impact of mismatch on city size, wage, and the number of cities are ambiguous. Without the information about average worker’s ability in cities, firms still can use city size as a screen device to sort out workers according to their abilities.
