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Analyzing the impact of labor market integration

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Author Info

  • Keisuke Kawata

    ()
    (Hiroshima University)

  • Kentaro Nakajima

    ()
    (Tohoku University)

  • Yasuhiro Sato

    ()
    (Osaka University)

Abstract

We develop a competitive search model involving multiple regions, geographically mobile work- ers, and moving costs. Equilibrium mobility patterns are analyzed and characterized, indicating that shocks to a particular region, such as a productivity shock, can propagate to other regions through workersf mobility. Moreover, equilibrium mobility patterns are not efficient due to the existence of moving costs, implying that they affect social welfare not only because they are costs but also be- cause they distort equilibrium allocation. By calibrating our framework to Japanese regional data, we demonstrate that the impacts of eliminating migration costs are comparable to those of a 30% productivity increase.

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Bibliographic Info

Paper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 13-28.

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Length: 39 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:osk:wpaper:1329

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Web page: http://www.econ.osaka-u.ac.jp/
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Keywords: geographical mobility of workers; competitive job search; moving costs; labor market inte- gration;

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  19. Molho, Ian, 2001. "Spatial Search, Migration and Regional Unemployment," Economica, London School of Economics and Political Science, vol. 68(270), pages 269-83, May.
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