Interregional migration and labor market imbalances
This paper investigates the effects of internal migration in developed countries on widening wage inequality and high unemployment, and it addresses the geographical dimension of both problems. A two-region dynamic model is developed, which accounts for the skill composition of recent internal migration flows; it also innovates on the existing literature on migration by introducing capital-skill complementarity in the production function. The main conclusion is that migration can actually aggravate labor market imbalances. In a competitive set-up, migration temporarily amplifies the geographical dispersion of unskilled workers’ wages and raises the average wage premium of the economy. When wage rigidities are introduced, labor mobility increases regional dispersion of unskilled workers’ employment. In the short-run it may even reduce the total employment of the economy. Copyright Springer-Verlag 2004
Volume (Year): 17 (2004)
Issue (Month): 2 (06)
|Contact details of provider:|| Web page: http://www.springer.com|
More information through EDIRC
|Order Information:||Web: http://www.springer.com/economics/population/journal/148/PS2|
When requesting a correction, please mention this item's handle: RePEc:spr:jopoec:v:17:y:2004:i:2:p:229-247. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.