Wage Formation, Regional Migration and Local Labour Market Tightness
AbstractEconomic theory predicts that local labour market tightness affects local wage setting as well as individuals’ migration decisions. But how should we measure local labour market tightness? In this paper we show that the common practice of using the local rate of unemployment as the tightness indicator may be misplaced. Instead, we propose a human capital adjusted outflow rate from unemployment that can be computed on the basis of micro register data. This outflow rate performs better than traditional measures of regional labour market conditions in panel data analyses of regional wages and interregional migration.
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Bibliographic InfoPaper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 2903.
Length: 27 pages
Date of creation:
Date of revision: 14 Feb 2003
Regional wages; interregional migration; labour market tightness;
Other versions of this item:
- Fredrik Carlsen & K�re Johansen & Knut R�ed, 2006. "Wage Formation, Regional Migration and Local Labour Market Tightness," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 423-444, 08.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-03-03 (All new papers)
- NEP-GEO-2003-03-03 (Economic Geography)
- NEP-LAB-2003-03-03 (Labour Economics)
- NEP-URE-2003-03-03 (Urban & Real Estate Economics)
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