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Geography, Migrations and Equilibrium Unemployment

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Abstract

We study the effects of trade integration on the regional coevolution of income, migrations and unemployment in a dynamic core-periphery model with limited labor mobility and frictions in the job matching process. Our model can help explain a recently documented empirical puzzle, i.e., the divergence of unemployment rates, together with low migrations and modest income convergence experienced by European regions over the last twenty years. By studying explicitly the transitional dynamics of the model, we also highlight a contrast between short run and long run effects of trade and policy shocks on a geographically differentiated economy.

Suggested Citation

  • Paolo Epifani & Gino Gancia, 2002. "Geography, Migrations and Equilibrium Unemployment," KITeS Working Papers 128, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2001.
  • Handle: RePEc:cri:cespri:wp128
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    1. Bentolila, Samuel, 1997. "Sticky labor in Spanish regions," European Economic Review, Elsevier, vol. 41(3-5), pages 591-598, April.
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    Cited by:

    1. Niebuhr, Annekatrin & Stiller, Silvia, 2004. "Integration and Labour Markets in European Border Regions," HWWA Discussion Papers 284, Hamburg Institute of International Economics (HWWA).
    2. repec:iab:iabzaf:v:39:i:1:p:57-76 is not listed on IDEAS
    3. Basile, Roberto & Padoa Schioppa, Fiorella Kostoris, 2002. "Unemployment Dynamics of the 'Mezzogiornos of Europe': Lessons for the Mezzogiorno of Italy," CEPR Discussion Papers 3594, C.E.P.R. Discussion Papers.
    4. Stephen Drinkwater & Paul Levine & Emanuela Lotti & Joseph Pearlman, 2003. "The Economic Impact of Migration: A Survey," School of Economics Discussion Papers 0103, School of Economics, University of Surrey.

    More about this item

    Keywords

    Patents; Integration; Agglomeration; Regional unemployment; Europe;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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