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Housing and the labor market: Time to move and aggregate unemployment

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  • Rupert, Peter
  • Wasmer, Etienne

Abstract

Conventional macro-search models (Mortensen and Pissarides) with unemployment benefits and taxes have been able to account for the variation in unemployment rates across countries but do not account for the role geographic mobility or commuting time might play. We build a model in which both unemployment and mobility rates are endogenous. Our findings indicate that an increase in unemployment benefits and in taxes does not generate a strong decline in mobility but does increase unemployment as in the standard model. We find that with higher commuting costs the effect of housing frictions plays a large role and can generate a substantial decline in mobility.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 59 (2012)
Issue (Month): 1 ()
Pages: 24-36

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Handle: RePEc:eee:moneco:v:59:y:2012:i:1:p:24-36

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Web page: http://www.elsevier.com/locate/inca/505566

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References

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  1. Peter RUPPERT & Elena STANCANELLI & Etienne WASMER, 2009. "Commuting, Wages and Bargaining Power," Annales d'Economie et de Statistique, ENSAE, issue 95-96, pages 201-220.
  2. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers.
  3. Gaumont, Damien & Schindler, Martin & Wright, Randall, 2006. "Alternative theories of wage dispersion," European Economic Review, Elsevier, vol. 50(4), pages 831-848, May.
  4. Rogers, Cynthia L., 1997. "Job Search and Unemployment Duration: Implications for the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 42(1), pages 109-132, July.
  5. Zax, Jeffrey S & Kain, John F, 1996. "Moving to the Suburbs: Do Relocating Companies Leave Their Black Employees Behind?," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 472-504, July.
  6. Edward C. Prescott, 2004. "Why Do Americans Work So Much More Than Europeans?," Levine's Bibliography 122247000000000413, UCLA Department of Economics.
  7. Ommeren, Jos van & Berg, Gerard J. van den & Gorter, Cees, 1998. "Estimating the marginal willingness to pay for commuting," Serie Research Memoranda 0046, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  8. Wasmer, Etienne & Zenou, Yves, 2002. "Does City Structure Affect Job Search and Welfare?," Journal of Urban Economics, Elsevier, vol. 51(3), pages 515-541, May.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Explaining high unemployment and low mobility in Europe
    by Economic Logician in Economic Logic on 2009-08-05 14:30:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Samuel Bentolila & Pierre Cahuc & Juan J. Dolado & Thomas Le Barbanchon, 2010. "Two-Tier Labor Markets In The Great Recession: France Vs. Spain," Working Papers wp2010_1009, CEMFI.
  2. Aida Caldera Sánchez & Dan Andrews, 2011. "To Move or not to Move: What Drives Residential Mobility Rates in the OECD?," OECD Economics Department Working Papers 846, OECD Publishing.
  3. Damba Lkhagvasuren, 2006. "Education, Mobility and the College Wage Premium," Working Papers 14001, Concordia University, Department of Economics, revised Nov 2013.
  4. Bonilla, Roberto & Kiraly, Francis, 2013. "Marriage wage premium in a search equilibrium," Labour Economics, Elsevier, vol. 24(C), pages 107-115.
  5. Taskin, A. A. & Yaman, F., 2013. "Homeownership and Unemployment Duration," Working Papers 13/04, Department of Economics, City University London.
  6. Lehmann, Etienne & Montero Ledezma, Paola L. & Van der Linden, Bruno, 2013. "Inefficient Equilibrium Unemployment in a Duocentric Economy with Matching Frictions," IZA Discussion Papers 7828, Institute for the Study of Labor (IZA).
  7. Allen Head & Huw Lloyd-Ellis, 2011. "Housing Liquidity, Mobility, and the Labour Market," Working Papers 1197, Queen's University, Department of Economics.
  8. Li Gan & Qinghua Zhang, 2013. "Market Thickness and the Impact of Unemployment on Housing Market Outcomes," NBER Working Papers 19564, National Bureau of Economic Research, Inc.
  9. Janiak, Alexandre, 2013. "Structural unemployment and the costs of firm entry and exit," Labour Economics, Elsevier, vol. 23(C), pages 1-19.

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  1. Economic Logic blog

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