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Compensation of Regional Unemployment in Housing Markets

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  • WOUTER VERMEULEN
  • JOS VAN OMMEREN

Abstract

Why are regional unemployment differentials in Europe so persistent if, as the wage curve literature demonstrates, there is no compensation through wages? Using Urban Audit data for 142 cities over 12 EU countries, as well as a Dutch household survey, we estimate relationships between local labour market indicators and the average house price level. The evidence suggests that workers are compensated in housing markets to a significant extent, so that regional differences in unemployment may reflect an equilibrium outcome.

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  • Wouter Vermeulen & Jos Van Ommeren, 2009. "Compensation of Regional Unemployment in Housing Markets," Economica, London School of Economics and Political Science, vol. 76(301), pages 71-88, February.
    • Handle: RePEc:bla:econom:v:76:y:2009:i:301:p:71-88
    DOI: 10.1111/j.1468-0335.2007.00664.x
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    More about this item

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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