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Wages, Rents, Unemployment, and the Quality of Life

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  • Wrede, Matthias

Abstract

Combining a spatial equilibrium model with a matching unemployment model, this paper analyzes the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. In particular, the paper shows for quasi-linear utility that the effects of any amenity on wages and unemployment rates are of opposite sign. Additionally, the wage rate and the labor market tightness increase and the unemployment ratio decreases in reaction to an increase in the level of an amenity if the amenity is marginally more beneficial to producers than to consumers per unit of land. Based on the model, quality of life of the unemployed in West German counties is estimated. --

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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century with number 62034.

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Date of creation: 2012
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Handle: RePEc:zbw:vfsc12:62034

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Cited by:
  1. Hiller, Norbert & Lerbsy, Oliver, 2014. "The capitalization of non-market attributes into regional housing rents and wages: Evidence on German functional labor market areas," CAWM Discussion Papers 71, Center of Applied Economic Research Münster (CAWM), University of Münster.

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