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Commuters, residents and job competition

  • Pierrard, Olivier

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.

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

Volume (Year): 38 (2008)
Issue (Month): 6 (November)
Pages: 565-577

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Handle: RePEc:eee:regeco:v:38:y:2008:i:6:p:565-577
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  1. Paolo Epifani & Gino Gancia, 2004. "Trade, Migration and Regional Unemployment," Working Papers 199, Barcelona Graduate School of Economics.
  2. Raquel Fonseca, 2003. "On the Interaction between Unemployment and Inter-regional Mobility," CSEF Working Papers 105, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  3. Frigyes Ferdinand Heinz & Melanie Ward-Warmedinger, 2006. "Cross-border labour mobility within an enlarged EU," Occasional Paper Series 52, European Central Bank.
  4. van Ommeren, Jos & Rietveld, Piet & Nijkamp, Peter, 1997. "Commuting: In Search of Jobs and Residences," Journal of Urban Economics, Elsevier, vol. 42(3), pages 402-421, November.
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  9. Coulson, N Edward & Laing, Derek & Wang, Ping, 2001. "Spatial Mismatch in Search Equilibrium," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 949-72, October.
  10. Pedro Portugal & Mário Centeno, 2001. "Wages of Civil Servants," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
  11. Thomas Matha & Ladislav Wintr, 2009. "Commuting flows across bordering regions: a note," Applied Economics Letters, Taylor & Francis Journals, vol. 16(7), pages 735-738.
  12. Ninette Pilegaard & Morten Marott Larsen & Jos Van Ommeren, 2005. "Congestion and Residential Moving Behaviour in the presence of Moving Costs," ERSA conference papers ersa05p520, European Regional Science Association.
  13. Pierrard, Olivier & Sneessens, Henri R., 2003. "Low-Skilled Unemployment, Biased Technological Shocks and Job Competition," IZA Discussion Papers 784, Institute for the Study of Labor (IZA).
  14. Van Ommeren, Jos & Rietveld, Piet, 2005. "The commuting time paradox," Journal of Urban Economics, Elsevier, vol. 58(3), pages 437-454, November.
  15. Yasuhiro Sato, 2004. "Migration, Frictional Unemployment, and Welfare-Improving Labor Policies," Journal of Regional Science, Wiley Blackwell, vol. 44(4), pages 773-793.
  16. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
  17. Wasmer, Etienne & Zenou, Yves, 2002. "Does City Structure Affect Job Search and Welfare?," Journal of Urban Economics, Elsevier, vol. 51(3), pages 515-541, May.
  18. Frank Cörvers & Maud Hensen, 2003. "The regionalization of labour markets by modelling commuting behaviour," ERSA conference papers ersa03p199, European Regional Science Association.
  19. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
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