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Modelling regional labour market dynamics: Participation, employment and migration decisions in a spatial CGE model for the EU

Author

Listed:
  • Persyn, Damiaan

    (European Commission, DG JRC-IPTS)

  • Torfs, Wouter

    (European Commission, DG JRC-IPTS)

  • Kancs, d’Artis

    (European Commission, DG JRC-IPTS)

Abstract

This paper outlines how regional labour market adjustments to macroeconomic and policy shocks are modelled in RHOMOLO through participation, employment and migration decisions of workers. RHOMOLO, being a multisectoral, inter-regional general equilibrium model, is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore constrained by the tractability and computational solvability of the model. The labour market module consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). Unemployment is determined through a wage curve and inter-regional labour migration decisions are modelled in a discrete-choice framework, with backward-looking expectations.

Suggested Citation

  • Persyn, Damiaan & Torfs, Wouter & Kancs, d’Artis, 2014. "Modelling regional labour market dynamics: Participation, employment and migration decisions in a spatial CGE model for the EU," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 29, pages 77-90.
  • Handle: RePEc:ris:invreg:0262
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    References listed on IDEAS

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    Cited by:

    1. Andries Brandsma & D'Artis Kancs, 2015. "RHOMOLO: A Dynamic General Equilibrium Modelling Approach to the Evaluation of the European Union's R&D Policies," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1340-1359, August.
    2. Pavel Ciaian & d'Artis Kancs & Julda Kielyte, 2016. "Migration to the EU: Social and Macroeconomic Effects on Sending Countries," EERI Research Paper Series EERI RP 2016/09, Economics and Econometrics Research Institute (EERI), Brussels.
    3. Pavel Ciaian & d’Artis Kancs, 2015. "Assessing the Social and Macroeconomic Impacts of Labour Market Integration: A Holistic Approach," JRC Working Papers JRC99645, Joint Research Centre (Seville site).
    4. Andries Brandsma & d'Artis Kancs & Philippe Monfort & Alexandra Rillaers, 2015. "RHOMOLO: A dynamic spatial general equilibrium model for assessing the impact of cohesion policy," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 197-221, November.
    5. Olga Ivanova & d'Artis Kancs & Dirk Stelder, 2009. "Modelling Inter-Regional Trade Flows: Data and Methodological Issues in Rhomolo," EERI Research Paper Series EERI RP 2009/31, Economics and Econometrics Research Institute (EERI), Brussels.
    6. Francesco Di Comite & D'Artis Kancs, 2015. "Macro-Economic Models for R&D and Innovation Policies - A Comparison of QUEST, RHOMOLO, GEM-E3 and NEMESIS," JRC Working Papers JRC94323, Joint Research Centre (Seville site).
    7. Patrizio Lecca & Javier Barbero Jimenez & Martin Aaroe Christensen & Andrea Conte & Francesco Di Comite & Jorge Diaz-Lanchas & Olga Diukanova & Giovanni Mandras & Damiaan Persyn & Stylianos Sakkas, 2018. "RHOMOLO V3:A Spatial Modelling Framework," JRC Working Papers JRC111861, Joint Research Centre (Seville site).
    8. Jean Mercenier & Maria Teresa Alvarez Martinez & Andries Brandsma & Francesco Di Comite & Olga Diukanova & d'Artis Kancs & Patrizio Lecca & Montserrat Lopez-Cobo & Philippe Monfort & Damiaan Persyn & , 2016. "RHOMOLO-v2 Model Description: A spatial computable general equilibrium model for EU regions and sectors," JRC Working Papers JRC100011, Joint Research Centre (Seville site).
    9. Brandsma, Andries & Di Comite, Francesco & Diukanova, Olga & Kancs, d’Artis & López-Rodríguez, Jesús & Persyn, Damiaan & Potters, Lesley, 2014. "Assessing policy options for the EU Cohesion Policy 2014-2020," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 29, pages 17-46.
    10. Francesco Di Comite & d’Artis Kancs, 2014. "Modelling of Agglomeration and Dispersion in RHOMOLO," JRC Working Papers JRC81349, Joint Research Centre (Seville site).

    More about this item

    Keywords

    Participation; unemployment; labour migration; wage curve; CGE; new economic geography;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • 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
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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