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Local labor market flexibility in a perceived low migration country: The case of French labor markets

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  • Détang-Dessendre, Cécile
  • Partridge, Mark D.
  • Piguet, Virginie

Abstract

Local labor markets are most flexible and aggregate natural unemployment is reduced when there is sufficient interregional economic migration to ensure that workers are reallocated from declining to expanding regions. Local European labor markets have generally been viewed as not as flexible as those in North America, leading to greater fluctuations in local wages, labor force participation and unemployment rates, and smaller changes in local employment as economic shocks are primarily experienced by the local area's original residents. France is an interesting case. French gross migration rates—though perhaps relatively low—are higher today than a generation ago. Using a host of novel identification approaches and French employment zone data dating back to the early 1980s, we investigate whether these changes correspond to economic migration that would increase labor market flexibility. Our results detect surprising amounts of economic migration in that most new jobs are eventually taken by new migrants or outside commuters. We then reconcile these somewhat surprising findings with the still relatively low contemporary French interregional gross migration rates, concluding that other structural impediments besides relative local labor market inflexibility are behind relatively poor labor market performance.

Suggested Citation

  • Détang-Dessendre, Cécile & Partridge, Mark D. & Piguet, Virginie, 2016. "Local labor market flexibility in a perceived low migration country: The case of French labor markets," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 89-103.
  • Handle: RePEc:eee:regeco:v:58:y:2016:i:c:p:89-103
    DOI: 10.1016/j.regsciurbeco.2016.03.003
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    References listed on IDEAS

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    Cited by:

    1. Emanuele Ciani & Francesco David & Guido de Blasio, 2017. "Local labour market heterogeneity in Italy: estimates and simulations using responses to labour demand shocks," Temi di discussione (Economic working papers) 1112, Bank of Italy, Economic Research and International Relations Area.
    2. Celia Melguizo Cháfe & Vicente Royuela, 2017. "“What drives migration moves across urban areas in Spain?. Evidence from the Great Recession”," AQR Working Papers 201709, University of Barcelona, Regional Quantitative Analysis Group, revised Sep 2017.
    3. Greenaway-McGrevy, Ryan & Hood, Kyle K., 2016. "Worker migration or job creation? Persistent shocks and regional recoveries," Journal of Urban Economics, Elsevier, vol. 96(C), pages 1-16.
    4. repec:wfo:wstudy:59156 is not listed on IDEAS
    5. Chen, Anping & Dai, Tianshi & Partridge, Mark, 2017. "Agglomeration and Firm Wage Inequality: Evidence from China," MPRA Paper 83516, University Library of Munich, Germany.

    More about this item

    Keywords

    Internal migration; Labor market flexibility; Rural urban disparities; Local labor market;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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