In this paper we investigate the impact on regional labour markets of an increase in primary factor productivity in the Utilities sector. We conjecture that such an increase in productivity is illustrative of the direct effects of national competition policy (NCP). We compute, at the regional level, indices of net labour inputs that are lost from such a productivity shock, finding that the direct effects of NCP involve significant labour market adjustment costs. However, those critics of competition policy reforms who have focussed on adjustment costs have ignored important general equilibrium effects such as the mitigation of adjustment costs in other industries, and, in particular, the effects on labour market adjustment from state government fiscal reactions. We also find that, so long as these general equilibrium effects are modelled, policy makers interested in regional adjustment costs can use indices of the change in regional employment and unemployment as good proxies for the extent of regional labour market adjustment costs.
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Volume (Year): 6 (2003) Issue (Month): 3 (September) Pages: 409-433 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population R15 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy
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