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Commuters, residents and job competition

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  • Pierrard, Olivier

Abstract

The mobility of labor across borders is an issue of increasing importance. The goal of this paper is to propose a simple model, in the spirit of the search unemployment literature, to better understand the effect of foreign commuters on domestic unemployment. We analytically show that the decision to commute depends on workers' productivity and employment perspectives. Under certain conditions, increasing competition from cross-border commuters may even generate positive externalities on domestic unemployment. The model is then applied to understand the case of Luxembourg where, in recent years, domestic unemployment has risen at the same time that the share of commuters increased.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 38 (2008)
Issue (Month): 6 (November)
Pages: 565-577

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Handle: RePEc:eee:regeco:v:38:y:2008:i:6:p:565-577

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Keywords: J61 J64 R23 Job competition Commuters Unemployment;

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References

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  1. Frank Cörvers & Maud Hensen, 2003. "The regionalization of labour markets by modelling commuting behaviour," ERSA conference papers ersa03p199, European Regional Science Association.
  2. Jos van Ommeren & Piet Rietveld, 2002. "Commuting, Spatial Search and Labour Market Bargaining," Tinbergen Institute Discussion Papers 02-039/3, Tinbergen Institute.
  3. Olivier, Pierrard & Henri R., Sneessens, 2002. "Low-Skilled Unemployment, Biased Technological Shocks and Job Competition," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 03 May 2002.
  4. Mary Amiti & Christopher Pissarides, 2005. "Trade and industrial location with heterogeneous labor," LSE Research Online Documents on Economics 2475, London School of Economics and Political Science, LSE Library.
  5. Frigyes Ferdinand Heinz & Melanie Ward-Warmedinger, 2006. "Cross-border labour mobility within an enlarged EU," Occasional Paper Series 52, European Central Bank.
  6. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, vol. 110(460), pages 92-112, January.
  7. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
  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.
  9. James Albrecht & Susan Vroman, 2000. "A Matching Model with Endogenous Skill Requirements," Econometric Society World Congress 2000 Contributed Papers 0774, Econometric Society.
  10. Ninette Pilegaard & Morten Marott Larsen & Jos Van Ommeren, 2005. "Congestion and Residential Moving Behaviour in the presence of Moving Costs," ERSA conference papers ersa05p520, European Regional Science Association.
  11. Paolo Epifani & Gino Gancia, 2002. "Trade, migration and regional unemployment," Economics Working Papers 832, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2003.
  12. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
  13. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  14. Pedro Portugal & Mário Centeno, 2001. "Wages of Civil Servants," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
  15. Coulson, N Edward & Laing, Derek & Wang, Ping, 2001. "Spatial Mismatch in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 949-72, October.
  16. Van Ommeren, Jos & Rietveld, Piet, 2005. "The commuting time paradox," Journal of Urban Economics, Elsevier, vol. 58(3), pages 437-454, November.
  17. van Ommeren, Jos & Rietveld, Piet & Nijkamp, Peter, 1997. "Commuting: In Search of Jobs and Residences," Journal of Urban Economics, Elsevier, vol. 42(3), pages 402-421, November.
  18. Raquel Fonseca, 2003. "On the Interaction between Unemployment and Inter-regional Mobility," CSEF Working Papers 105, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  19. Yasuhiro Sato, 2004. "Migration, Frictional Unemployment, and Welfare-Improving Labor Policies," Journal of Regional Science, Wiley Blackwell, vol. 44(4), pages 773-793.
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Citations

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Cited by:
  1. Olivier Pierrard & Henri R. Sneessens, 2009. "LOLA 1.0: Luxembourg overLapping generation model for policy analysis," BCL working papers 36, Central Bank of Luxembourg.
  2. Luca Marchiori & Olivier Pierrard, 2012. "LOLA 2.0: Luxembourg OverLapping generation model for policy Analysis," BCL working papers 76, Central Bank of Luxembourg.
  3. Daniel Martin & Olivier Pierrard, 2011. "On-the-job Search and Cyclical Unemployment: Crowding Out vs. Vacancy Effects," BCL working papers 64, Central Bank of Luxembourg.
  4. Luca Marchiori & Olivier Pierrard & Henri R. Sneessens, 2012. "Aging, labour market dynamics and fiscal imbalances," National Bank of Poland Working Papers 122, National Bank of Poland, Economic Institute.
  5. Burlacu, Irina & O'Donoghue, Cathal, 2012. "Differential welfare state impacts for frontier working age families," MERIT Working Papers 061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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