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Transport Costs in a Multiregional Equilibrium Job Search Model

In: Road Pricing, the Economy and the Environment

Author

Listed:
  • Morten Marott Larsen

    (AKF)

  • Ninette Pilegaard

    (Danish Transport Research Institute)

  • Jos Ommeren

    (VU University)

Abstract

In this chapter, we introduce a multiregional equilibrium job search model to analyse the economic effects of intraregional and interregional transport cost changes. The key assumption is that unemployed job seekers and firms with vacancies have to search for each other. The regional unemployment and vacancy equilibrium rates, as well as the wage levels, are endogenously determined. According to the model, decreases in interregional transport costs tend to reduce local and national unemployment and increase vacancies. Model simulations indicate that wages are less sensitive compared to producer prices and that both labour-market search effects and negative externalities have substantial impacts on the overall effect of changes in transport costs.

Suggested Citation

  • Morten Marott Larsen & Ninette Pilegaard & Jos Ommeren, 2008. "Transport Costs in a Multiregional Equilibrium Job Search Model," Advances in Spatial Science, in: Chris Jensen-Butler & Birgitte Sloth & Morten Marott Larsen & Bjarne Madsen & Otto Anker Nielsen (ed.), Road Pricing, the Economy and the Environment, chapter 8, pages 133-166, Springer.
    • Handle: RePEc:spr:adspcp:978-3-540-77150-0_8
    DOI: 10.1007/978-3-540-77150-0_8
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