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Externalities from Labor Mobility

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  • Laurence Ball

Abstract

This paper assumes that workers can move from a market with high unemployment to one with low unemployment at a cost. In principle. equilibrium mobility can be greater or less than the social optimum. For most plausible parameter values. however. mobility is too low. Intuitively. mobility has a beneficial externality: it helps workers remaining in the high-unemployment market by reducing competition for jobs. Mobility hurts workers in the market that movers join, but this effect is usually smaller.

Suggested Citation

  • Laurence Ball, 1991. "Externalities from Labor Mobility," NBER Working Papers 3720, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3720
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