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Agglomeration, congestion, and regional unemployment disparities

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  • Ulrich Zierahn

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Abstract

Regional labor markets are characterized by huge disparities between unemployment rates. Models of the New Economic Geography explain how disparities between regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing a wage curve based on efficiency wages into the New Economic Geography. The model shows how disparities between regional goods and labor markets endogenously arise through the interplay of increasing returns to scale, transport costs, congestion costs, and migration. The level and stability of regional labor market disparities depends on the extend of labor market frictions. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Ulrich Zierahn, 2013. "Agglomeration, congestion, and regional unemployment disparities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 435-457, October.
  • Handle: RePEc:spr:anresc:v:51:y:2013:i:2:p:435-457
    DOI: 10.1007/s00168-013-0555-3
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    References listed on IDEAS

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    Cited by:

    1. Zierahn, Ulrich, 2012. "Monocentric cities, endogenous agglomeration, and unemployment disparities," HWWI Research Papers 130, Hamburg Institute of International Economics (HWWI).
    2. Zierahn, Ulrich, 2011. "Regional unemployment and new economic geography," HWWI Research Papers 105, Hamburg Institute of International Economics (HWWI).
    3. Xi Yang, 2014. "Labor market frictions, agglomeration, and regional unemployment disparities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 489-512, March.
    4. Kondo, Keisuke, 2015. "Spatial persistence of Japanese unemployment rates," Japan and the World Economy, Elsevier, vol. 36(C), pages 113-122.

    More about this item

    Keywords

    F15; R12; R23;

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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