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Globalization, Peripherality and Regional Unemployment Divergence

Author

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  • Paolo Epifani

    (CESPRI, Università Bocconi; LIUC)

Abstract

The cultural and geographic proximity between two regions otherwise very distant (both in terms of factor endowment and of specialization pattern) makes the wage perceived as fair in the peripheral region dependent on the wage prevailing in the core region. As a consequence, the peripheral wage is too high and unemployment results. This problem is exacerbated by the greater international division of labor brought about by globalization, which increases the coriperiphery labor productivity gap and so brings about a surge in unemployment in the periphery. Hence, this paper challenges, in a regional context, the view that a finer division of labor reduces unemployment, and offers an explanation of the growing differentials in the regional rates of unemployment observed in many EU countries in the last decades.

Suggested Citation

  • Paolo Epifani, 2000. "Globalization, Peripherality and Regional Unemployment Divergence," Development Working Papers 135, Centro Studi Luca d'Agliano, University of Milano.
  • Handle: RePEc:csl:devewp:135
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    File URL: http://www.dagliano.unimi.it/media/WP2000_135.pdf
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    Cited by:

    1. Marelli, Enrico, 1999. "Convergence and asymmetries in the employment dynamics of the European regions," ERSA conference papers ersa99pa120, European Regional Science Association.
    2. Naude, Willem & Coetzee, Rian, 2004. "Globalisation and inequality in South Africa: modelling the labour market transmission," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 911-925, December.

    More about this item

    Keywords

    regional unemployment; international division of labor; efficiency wages; Europe;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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