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(In)Efficient Commuting And Migration Choices: Theory And Policy In An Urban Search Model

Author

Listed:
  • Luca Marchiori

    (Banque centrale du Luxembourg, Département Économie et Recherche)

  • Julien Pascal

    (Banque centrale du Luxembourg, Département Économie et Recherche)

  • Olivier Pierrard

    (Banque centrale du Luxembourg, Département Économie et Recherche)

Abstract

We develop a monocentric urban search-and-matching model in which workers can choose to commute or to migrate within the region. The equilibrium endogenously allocates the population into three categories: migrants (relocate from their hometown to the city), commuters (traveling to work in the city) and home stayers (remaining in their hometown). We prove that the market equilibrium is usually not optimal: a composition externality may generate under- or over-migration with respect to the central planner’s solution, which in all cases results in under-investment in job vacancies and therefore production. We calibrate the model to the Greater Paris area to reproduce several gradients observed in the data, suggesting over-migration. We show how policy interventions can help to reduce inefficiencies.

Suggested Citation

  • Luca Marchiori & Julien Pascal & Olivier Pierrard, 2022. "(In)Efficient Commuting And Migration Choices: Theory And Policy In An Urban Search Model," LIDAM Discussion Papers IRES 2022006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2022006
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    References listed on IDEAS

    as
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. (In)Efficient Commuting And Migration Choices: Theory And Policy In An Urban Search Model
      by Christian Zimmermann in NEP-DGE blog on 2022-04-16 21:49:42

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    2. Julien Pascal, 2023. "Rental housing market and directed search," BCL working papers 179, Central Bank of Luxembourg.

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    More about this item

    Keywords

    Migration; Commuting; Urban search-and-matching; Efficiency; Policy;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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