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On the impact of labor market matching on regional disparities

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  • THARAKAN, Jo

    (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))

  • TROPEANO, Jean-Philippe

Abstract

We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics of workers' and firms' location choices, we show that the spatial outcome depends crucially on different dimensions of agents' mobility. The effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile or more specialized on the labor market.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2008046.

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Date of creation: 01 Aug 2008
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Handle: RePEc:cor:louvco:2008046

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Keywords: economic geography; local labor market; regional disparities; human capital.;

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