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Trade, migration and regional unemployment

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  • Paolo Epifani
  • Gino Gancia

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Abstract

We formulate a dynamic core-periphery model with frictions in the job matching process to study the interplay between trade costs, migration and regional unemploymentin the short- and long-run. We find that the spatial distribution of unemployment mirrors (inversely) the distribution of economic activities. Further, we highlight a contrast between the short-run and the long-run effects of trade-induced migration on regional unemployment. In particular, an inßow of immigrants from the periphery into the core reduces the unemployment gap in the short-run, but exacerbates unemployment disparities in the long-run.

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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 832.

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Date of creation: Mar 2002
Date of revision: Nov 2003
Handle: RePEc:upf:upfgen:832

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Web page: http://www.econ.upf.edu/

Related research

Keywords: Integration; Agglomeration; Search frictions; Labor mobility; Regional disparities;

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