Integration, Agglomeration and the Political Economics of Factor Mobility
AbstractThis paper tackles the issue of the optimality of agglomeration in a two-region economy with skilled/mobile and unskilled/immobile workers. The market leads to the optimal outcome when transport costs are high or low. However, for intermediate values, it yields agglomeration whereas dispersion is socially desirable. We show that competitive lobbying on factor mobility by the two groups of workers sustains the second best optimum.
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Bibliographic InfoPaper provided by European University Institute in its series Economics Working Papers with number eco99/27.
Length: 30 pages
Date of creation: 1999
Date of revision:
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Postal: Badia Fiesolana, Via dei Roccettini, 9, 50016 San Domenico di Fiesole (FI) Italy
Web page: http://www.eui.eu/ECO/
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ECONOMIC INTEGRATION ; POLITICS ; LABOUR MIGRATION ; LABOUR MOBILITY;
Other versions of this item:
- Ottaviano, Gianmarco I. P. & Thisse, Jacques-Francois, 2002. "Integration, agglomeration and the political economics of factor mobility," Journal of Public Economics, Elsevier, vol. 83(3), pages 429-456, March.
- Ottaviano, Gianmarco Ireo Paolo & Thisse, Jacques-François, 1999. "Integration, Agglomeration and the Political Economics of Factor Mobility," CEPR Discussion Papers 2185, C.E.P.R. Discussion Papers.
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- F15 - International Economics - - Trade - - - Economic Integration
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