[The impact of wage formation on residential structure]

We study the wage formation under complete and incomplete information when the labor force is heterogeneous. In the first case, the best-matched workers earn the highest wages while in the second, workers with the greatest bargaining power obtain the highest wages, even though they have the worst job-matching. This wage difference is reflected in the urban spatial structure : the richest workers reside close to the employment-center because their bid rents are the highest in the city. There is therefore a one-to-one correspondence between the labor and urban markets since the residential structure depends heavily on the type of information that prevails in the labor market