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On the Impact of Labor Market Matching on Regional Disparities

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Author Info
Joe Tharakan (University College Dublin)
Jean-Philippe Tropeano (Université Paris 1)
Abstract

We propose a model where imperfect matching between firms and workers on local labor markets leads to spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. We analyse the effect of different public policies. In our setting, the effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile on the labour market or more specialised. Policies that increase workers’ interregional mobility, increase the likelihood that regions diverge. Finally, competition policy is shown to reduce regional disparities.

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File URL: http://www.ucd.ie/economics/research/papers/2002/WP02.27.pdf
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File Function: First version, 2002
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Paper provided by School Of Economics, University College Dublin in its series Working Papers with number 200227.

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Length: 40 pages
Date of creation: 14 Oct 2002
Date of revision:
Handle: RePEc:ucn:wpaper:200227

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Related research
Keywords: Economic geography; local labor market; regional disparities; human capital;

Find related papers by JEL classification:
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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  2. Hamilton, Jonathan & Thisse, Jacques-François & Zenou, Yves, 1999. "Wage Competition with Heterogeneous Workers and Firms," CEPR Discussion Papers 2141, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Picard, Pierre M. & Toulemonde, Eric, 2004. "Endogenous qualifications and firms' agglomeration," Journal of Urban Economics, Elsevier, vol. 55(3), pages 458-477, May. [Downloadable!] (restricted)
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  4. Martin, Philippe, 1999. "Public policies, regional inequalities and growth," Journal of Public Economics, Elsevier, vol. 73(1), pages 85-105, July. [Downloadable!] (restricted)
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  5. Kats, Amoz, 1995. "More on Hotelling's stability in competition," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 89-93, March. [Downloadable!] (restricted)
  6. Reichlin, Pietro & Rustichini, Aldo, 1998. "Diverging patterns with endogenous labor migration," Journal of Economic Dynamics and Control, Elsevier, vol. 22(5), pages 703-728, May. [Downloadable!] (restricted)
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  11. Economides, Nicholas, 1989. "Symmetric equilibrium existence and optimality in differentiated product markets," Journal of Economic Theory, Elsevier, vol. 47(1), pages 178-194, February. [Downloadable!] (restricted)
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  13. Helsley, Robert W. & Strange, William C., 1990. "Matching and agglomeration economies in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 189-212, September. [Downloadable!] (restricted)
  14. Guy Dumais & Glenn Ellison & Edward Glaeser, 1997. "Geographic Concentration as a Dynamic Process," NBER Working Papers 6270, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Venables, Anthony J, 1996. "Localization of Industry and Trade Performance," Oxford Review of Economic Policy, Oxford University Press, vol. 12(3), pages 52-60, Autumn.
  16. Miyagiwa, Kaz, 1991. "Scale Economies in Education and the Brain Drain Problem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 743-59, August. [Downloadable!] (restricted)
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