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The Impact of Labor Markets on Emergence and Persistence of Regional Asymmetries

Author

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  • Picard, Pierre M.

    (University of Luxembourg)

  • Toulemonde, Eric

    (University of Namur)

Abstract

This paper investigates the impact of labor markets and economies of agglomeration on firms location. We show that the existence of a lower bound on wage (e.g. a minimum wage or a reservation wage) introduces asymmetric location of firms. Moreover, changes in that lower bound or in global product demand may induce irreversible changes in location equilibria. Asymmetries in firms location may thus emerge and persist.

Suggested Citation

  • Picard, Pierre M. & Toulemonde, Eric, 2001. "The Impact of Labor Markets on Emergence and Persistence of Regional Asymmetries," IZA Discussion Papers 248, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp248
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    Cited by:

    1. Philipp vom Berge, 2013. "Search unemployment and new economic geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 731-751, June.
    2. vom Berge, Philipp, 2011. "Search Unemployment and New Economic Geography," University of Regensburg Working Papers in Business, Economics and Management Information Systems 454, University of Regensburg, Department of Economics.
    3. Isabelle Méjean & Lise Patureau, 2007. "Location Decisions and Minimum Wages," Working Papers 2007-16, CEPII research center.

    More about this item

    Keywords

    persistence; Firms location; wages;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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