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Commuters, residents and job competition

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  • Pierrard, Olivier

Abstract

The mobility of labor across borders is an issue of increasing importance. The goal of this paper is to propose a simple model, in the spirit of the search unemployment literature, to better understand the effect of foreign commuters on domestic unemployment. We analytically show that the decision to commute depends on workers' productivity and employment perspectives. Under certain conditions, increasing competition from cross-border commuters may even generate positive externalities on domestic unemployment. The model is then applied to understand the case of Luxembourg where, in recent years, domestic unemployment has risen at the same time that the share of commuters increased.

Suggested Citation

  • Pierrard, Olivier, 2008. "Commuters, residents and job competition," Regional Science and Urban Economics, Elsevier, vol. 38(6), pages 565-577, November.
  • Handle: RePEc:eee:regeco:v:38:y:2008:i:6:p:565-577
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Marchiori, Luca & Pierrard, Olivier, 2017. "How does global demand for financial services promote domestic growth in Luxembourg? A dynamic general equilibrium analysis," Economic Modelling, Elsevier, vol. 62(C), pages 103-123.
    2. Martin, Daniel & Pierrard, Olivier, 2014. "On-the-job search and cyclical unemployment: Crowding out vs. vacancy effects," Journal of Economic Dynamics and Control, Elsevier, vol. 44(C), pages 235-250.
    3. Luca Marchiori & Patrice Pieretti & Benteng Zou, 2014. "Immigration, occupational choice and public employment," CREA Discussion Paper Series 14-15, Center for Research in Economic Analysis, University of Luxembourg.
    4. Luca Marchiori & Olivier Pierrard, 2012. "LOLA 2.0: Luxembourg OverLapping generation model for policy Analysis," BCL working papers 76, Central Bank of Luxembourg.
    5. Olivier Pierrard & Henri R. Sneessens, 2009. "LOLA 1.0: Luxembourg overLapping generation model for policy analysis," BCL working papers 36, Central Bank of Luxembourg.
    6. Dickerson, Andy & Hole, Arne Risa & Munford, Luke A., 2014. "The relationship between well-being and commuting revisited: Does the choice of methodology matter?," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 321-329.
    7. Burlacu, Irina S. & O'Donoghue, Cathal, 2012. "Differential Welfare State Impacts for Frontier Working Age Families," IZA Discussion Papers 6734, Institute for the Study of Labor (IZA).
    8. Luca Marchiori & Olivier Pierrard & Henri R. Sneessens, 2012. "Aging, labour market dynamics and fiscal imbalances," NBP Working Papers 122, Narodowy Bank Polski, Economic Research Department.

    More about this item

    Keywords

    J61 J64 R23 Job competition Commuters Unemployment;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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