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On the impact of labor market matching on regional disparities

Author

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  • THARAKAN, Jo

    (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))

  • TROPEANO, Jean-Philippe

Abstract

We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics of workers' and firms' location choices, we show that the spatial outcome depends crucially on different dimensions of agents' mobility. The effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile or more specialized on the labor market.

Suggested Citation

  • THARAKAN, Jo & TROPEANO, Jean-Philippe, 2008. "On the impact of labor market matching on regional disparities," LIDAM Discussion Papers CORE 2008046, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2008046
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    Cited by:

    1. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117, Elsevier.
    2. Li, Qiang, 2013. "Language and urban labor market segmentation: Theory and evidence," Journal of Urban Economics, Elsevier, vol. 74(C), pages 27-46.

    More about this item

    Keywords

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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