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On the Interaction between Unemployment and Inter-regional Mobility

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Abstract

This paper aims at examining the interaction between unemployment and inter-regional mobility in the presence of asymmetric productivity shocks. We present an intertemporal two-regions equilibrium model where unemployed workers can migrate from one region to another. The hiring process is represented by a matching function à la Pissarides. We also analyse the wage setting procedure by introducing Nash bargaining between firms and employees. We compare two extremely different scenarios. The case where there is no mobility with unemployment persistence versus the same economy where perfect mobility is assumed. This paper also studied different types of asymmetries such as changes in "unemployment benefits" and/or the cost of posting vacancies. We show the importance of these changes to explain regional unemployment disparities.Finally, we calibrate the model for Spain and we analyse the relevance of the model in explaining regional disparities and inter-regional labour force mobility

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Bibliographic Info

Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 105.

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Date of creation: 01 Sep 2003
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Handle: RePEc:sef:csefwp:105

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Keywords: Migration; Unemployment; Nash bargaining;

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References

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  1. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-31, October.
  2. Olympia Bover & Pilar Velilla, 1999. "Migrations in Spain: Historical Background and Current Trends," Banco de Espa�a Working Papers 9909, Banco de Espa�a.
  3. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
  4. Mincer, Jacob, 1978. "Family Migration Decisions," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 749-73, October.
  5. Carlo Devillanova & Walter García-Fontes, 2004. "Migration across Spanish provinces: evidence from the social security records (1978-1992)," Investigaciones Economicas, Fundación SEPI, vol. 28(3), pages 461-487, September.
  6. Jackman, Richard & Savouri, Savvas, 1992. "Regional Migration in Britain: An Analysis of Gross Flows Using NHS Central Register Data," Economic Journal, Royal Economic Society, vol. 102(415), pages 1433-50, November.
  7. Decressin, Jörg & Fatás, Antonio, 1994. "Regional Labour Market Dynamics in Europe," CEPR Discussion Papers 1085, C.E.P.R. Discussion Papers.
  8. Pablo Antolín, 1994. "International migration flows: The case of Spain (1960-1988)," Working Papers. Serie EC 1994-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  9. Pissarides, Christopher A & Wadsworth, Jonathan, 1989. "Unemployment and the Inter-regional Mobility of Labour," Economic Journal, Royal Economic Society, vol. 99(397), pages 739-55, September.
  10. John M. Abowd & Francis Kramarz, 1997. "The Costs of Hiring and Separations," NBER Working Papers 6110, National Bureau of Economic Research, Inc.
  11. Juillard, Michel, 1996. "Dynare : a program for the resolution and simulation of dynamic models with forward variables through the use of a relaxation algorithm," CEPREMAP Working Papers (Couverture Orange) 9602, CEPREMAP.
  12. Jackman, R & Layard, Richard & Pissarides, C, 1989. "On Vacancies," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(4), pages 377-94, November.
  13. Gilles Saint-Paul, 1994. "Are the Unemployed Unemployable?," IMF Working Papers 94/64, International Monetary Fund.
  14. Overman, Henry G. & Puga, Diego, 1999. "Unemployment Clusters Across European Regions and Countries," CEPR Discussion Papers 2255, C.E.P.R. Discussion Papers.
  15. Burda, Michael C & Profit, Stefan, 1996. "Matching Across Space: Evidence on Mobility in the Czech Republic," CEPR Discussion Papers 1364, C.E.P.R. Discussion Papers.
  16. Cahuc, Pierre & Wasmer, Etienne, 2001. "Does Intrafirm Bargaining Matter In The Large Firm'S Matching Model?," Macroeconomic Dynamics, Cambridge University Press, vol. 5(05), pages 742-747, November.
  17. Andolfatto, David, 1996. "Business Cycles and Labor-Market Search," American Economic Review, American Economic Association, vol. 86(1), pages 112-32, March.
  18. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  19. Boeri, Tito & Scarpetta, Stefano, 1996. "Regional mismatch and the transition to a market economy," Labour Economics, Elsevier, vol. 3(3), pages 233-254, October.
  20. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
  21. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
  22. Olympia Bover & Pilar Velilla, 1999. "Migrations in Spain: Historical Background and Current Trends," Banco de Espa�a Working Papers 9909, Banco de Espa�a.
  23. Manon Domingues Dos Santos, 1998. "Intégration économique, migrations et chômage," Revue Économique, Programme National Persée, vol. 49(5), pages 1269-1292.
  24. Francisco J. Gil & Maria Jesus Martin & Angel Serrat, 1994. "Movilidad en el mercado de trabajo en España: un análisis econométrico de duración con riesgos en competencia," Investigaciones Economicas, Fundación SEPI, vol. 18(3), pages 517-537, September.
  25. Boucekkine, Raouf, 1995. "An alternative methodology for solving nonlinear forward-looking models," Journal of Economic Dynamics and Control, Elsevier, vol. 19(4), pages 711-734, May.
  26. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, vol. 110(460), pages 92-112, January.
  27. Antolin, Pablo & Bover, Olympia, 1997. "Regional Migration in Spain: The Effect of Personal Characteristics and of Unemployment, Wage and House Price Differentials Using Pooled Cross-Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 215-35, May.
  28. Hughes, Gordon & McCormick, Barry, 1981. "Do Council Housing Policies Reduce Migration between Regions?," Economic Journal, Royal Economic Society, vol. 91(364), pages 919-37, December.
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  30. repec:cup:macdyn:v:5:y:2002:i:05:p:742-747_03 is not listed on IDEAS
  31. Dolado, Juan J. & Duce, Rosa & Jimeno, Juan Francisco, 1996. "The Effects of Migration on the Relative Demand of Skilled versus Unskilled Labour: Evidence from Spain," CEPR Discussion Papers 1476, C.E.P.R. Discussion Papers.
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Cited by:
  1. Vanessa LUTGEN & Bruno VAN DER LINDEN, 2013. "Regional Equilibrium Unemployment Theory at the Age of the Internet," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Pierrard, Olivier, 2008. "Commuters, residents and job competition," Regional Science and Urban Economics, Elsevier, vol. 38(6), pages 565-577, November.

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