Commuting, housing, and labor markets

Abstract

In themonocentric model, commuting is viewed as a burden whose cost shapes the spatial structure of cities to a considerable extent. This view has been challenged by the finding that actual commuting patterns are far from efficient. However, this “wasteful” commuting is better interpreted as an indication of labor market frictions that are traded off against commuting frictions than as a neglect of commuting costs. Urban sprawl results from the decreasing importance of physical space that was the consequence of the automobile and is fundamentally consistent with the basic insights of the monocentricmodel. Large and diversified urban labormarkets flourish when space restrictions are relaxed because this facilitates the matching of jobs andworkers along other dimensions.Having a largemortgage putsmore stress on this allocation mechanism.