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Human Capital, Local Labor Markets and Regional Interaction

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  • Laurence Rioux

    (INSEE)

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    Abstract

    This paper investigates the impact of regional integration on the incentives for local governments to finance general human capital in a context of oligopsonistic labor markets, where firm's specific skills are obtained through specific training. General human capital increases both a worker's productivity (productivity effect) and its ability to learn new firm's specific skills (flexibility effect). For symmetric regions, integration leads to a ''race to the top'' or to a '' race to the bottom'' in local public educational policies depending on whether the productivit effect dominates or not the flexibility effect. The paper discusses also the effects of integration on regional wages, intra-regional wage inequalities and integration between regions different in size or productivity.

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    Bibliographic Info

    Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1740.

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    Date of creation: 01 Aug 2000
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    Handle: RePEc:ecm:wc2000:1740

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    1. Jong-Il Kim & Lawrence J. Lau, 1996. "The sources of Asian Pacific economic growth," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 448-54, April.
    2. Thisse, J.- F. & Zenou, Y., . "Appariement et concurrence spatiale sur le marché du travail," CORE Discussion Papers RP -1143, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Wildasin, David E., 1989. "Interjurisdictional capital mobility: Fiscal externality and a corrective subsidy," Journal of Urban Economics, Elsevier, vol. 25(2), pages 193-212, March.
    4. JELLAL, Mohamed & THISSE, Jacques-François & ZENOU, Yves, 1997. "Demand uncertainty, mismatch, and (un)employment," CORE Discussion Papers 1997033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Wildasin, D.E., 1987. "Nash equilibria in models of fiscal competition," CORE Discussion Papers 1987020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Bucovetsky, S., 1991. "Asymmetric tax competition," Journal of Urban Economics, Elsevier, vol. 30(2), pages 167-181, September.
    7. Wilson, J.D., 1990. "Tax Competition With Interregional Differences In Factor Endowments," Working Papers 4, John Deutsch Institute for the Study of Economic Policy.
    8. Kim, Sunwoong, 1989. "Labor Specialization and the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 692-705, June.
    9. Wilson, John D., 1986. "A theory of interregional tax competition," Journal of Urban Economics, Elsevier, vol. 19(3), pages 296-315, May.
    10. Kennan, John & Riezman, Raymond, 1988. "Do Big Countries Win Tariff Wars?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(1), pages 81-85, February.
    11. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    12. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
    13. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
    14. Kremer, Michael, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 551-75, August.
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