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Trade, migration and regional unemployment

  • Epifani, Paolo
  • Gancia, Gino A.

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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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 35 (2005)
Issue (Month): 6 (November)
Pages: 625-644

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Handle: RePEc:eee:regeco:v:35:y:2005:i:6:p:625-644
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