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The Efficiency Basis for Regional Employment Policy

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  • Robin W. Boadway
  • Frank R. Flatters

Abstract

Is there a theoretical basis for subsidizing employment in low-income regions? A two-region model is analyzed where there is migration of labour between regions, costs of migration, and unemployment in the low-income region. Workers migrate according to the expected wage net of the cost of migration. When there are no transfers, an unambiguous case can be made for encouraging employment in the poor region. However, when transfers to residents of the low-income region exist, the case becomes ambiguous.
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  • Robin W. Boadway & Frank R. Flatters, 1981. "The Efficiency Basis for Regional Employment Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 14(1), pages 58-77, February.
    • Handle: RePEc:cje:issued:v:14:y:1981:i:1:p:58-77
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    Cited by:

    1. Strain, J. Frank, 1993. "Integration, Federalism and Cohesion in the European Community: Lessons from Canada," Research Series, Economic and Social Research Institute (ESRI), number PRS16, June.
    2. Glenn P. Jenkins, 1981. "The Public-Sector Discount Rate for Canada: Some Further Observations," Canadian Public Policy, University of Toronto Press, vol. 7(3), pages 399-407, Summer.
    3. Gerry Boyle & Tom McCarthy & Jim Walsh, 1999. "Regional Income Differentials and the Issue of Regional Equalisation in Ireland," Economics Department Working Paper Series n880499, Department of Economics, National University of Ireland - Maynooth.
    4. Glenn Jenkins & Chun-Yan Kuo & Arnold C. Harberger, 2011. "Cost-Benefit Analysis for Investment Decisions: Chapter 12 (The Economic Opportunity Cost of Labor)," Development Discussion Papers 2011-12, JDI Executive Programs.
    5. Chiara Del Bo & Carlo Fiorio & Massimo Florio, 2011. "Shadow Wages for the EU Regions," Fiscal Studies, Institute for Fiscal Studies, vol. 32(1), pages 109-143, March.
    6. Glenn P. Jenkins & Chun-Yan kuo & Arnold C. Harberger, 2020. "Analyse Couts-Avantages Pour Les Decisions D’Investissement Chapitre 12; L'opportunité Économique Coût Du Travail," Development Discussion Papers 2020-12, JDI Executive Programs.
    7. Homburg, Stefan, 1997. "Ursachen und Wirkungen eines zwischenstaatlichen Finanzausgleichs," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 61-95.
    8. Ohlsson, Henry, 1987. " Cost-Benefit Rules in a Regionalized Disequilibrium Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 89(2), pages 165-182.
    9. Surendra Gera, 1987. "An Evaluation of the Canadian Employment Tax Credit Program," Canadian Public Policy, University of Toronto Press, vol. 13(2), pages 196-207, June.

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