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An agent-based computational approach to explaining persistent spatial unemployment disparities

  • McArthur, David

    ()

    (Stord/Haugesund University College)

  • Thorsen, Inge

    ()

    (Stord/Haugesund University College)

  • Ubøe, Jan

    ()

    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

This paper explores possible reasons for persistent spatial unemployment disparities using agent-based computational methods. The method relies on observing the actions of thousands of individuals within an artificial society. The paper models the effect of unemployment insurance, wage disparities, region specific amenities and innate residential preferences on regional labour market interactions, accounting for both migration and commuting. An empirical example of Rogaland county in south-west Norway is given, where unemployment disparities have proved remarkably persistent for decades. The model provides non-trivial insight into the nature of spatial unemployment disparities as well as making a valuable contribution to the policy debate.

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File URL: http://hdl.handle.net/11250/163984
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Paper provided by Department of Business and Management Science, Norwegian School of Economics in its series Discussion Papers with number 2008/17.

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Length: 30 pages
Date of creation: 22 Sep 2008
Date of revision:
Handle: RePEc:hhs:nhhfms:2008_017
Contact details of provider: Postal: NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 95 92 93
Fax: +47 55 95 96 50
Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
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  1. Brouwer, A.E. & Mariotti, I. & Ommeren, J.N. van, 2003. "The firm relocation decision: an empirical investigation," Serie Research Memoranda 0023, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  2. Fabian Bornhorst & Simon Commander, 2006. "Regional unemployment and its persistence in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(2), pages 269-288, 04.
  3. Arellano, Manuel & Bentolila, Samuel & Bover, Olympia, 1998. "Unemployment Duration, Benefit Duration and the Business Cycle," CEPR Discussion Papers 1840, C.E.P.R. Discussion Papers.
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  7. Puhani, Patrick A., 1999. "Labour mobility - an adjustment mechanism in Euroland? Empirical evidence for Western Germany, France and Italy," ZEW Discussion Papers 99-47, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
  9. Fidrmuc, Jan, 2004. "Migration and regional adjustment to asymmetric shocks in transition economies," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 230-247, June.
  10. Mark Partridge & Dan Rickman, 1997. "The Dispersion of US State Unemployment Rates: The Role of Market and Non-market Equilibrium Factors," Regional Studies, Taylor & Francis Journals, vol. 31(6), pages 593-606.
  11. Thiess Buettner, 2007. "Unemployment disparities and regional wage flexibility: comparing EU members and EU-accession countries," Empirica, Springer, vol. 34(4), pages 287-297, September.
  12. J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 709-748, December.
  13. Marston, Stephen T, 1985. "Two Views of the Geographic Distribution of Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 57-79, February.
  14. Jouke van Dijk & Piet H. Pellenbarg, 2000. "Firm relocation decisions in The Netherlands: An ordered logit approach," Papers in Regional Science, Springer, vol. 79(2), pages 191-219.
  15. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2004. "Spatial Wage Disparities: Sorting Matters!," CEPR Discussion Papers 4240, C.E.P.R. Discussion Papers.
  16. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
  17. Tesfatsion, Leigh S., 2001. "Introduction to the Special Issue on Agent-Based Computational Economics," Staff General Research Papers 1915, Iowa State University, Department of Economics.
  18. Leo van Wissen, 2000. "A micro-simulation model of firms: Applications of concepts of the demography of the firm," Papers in Regional Science, Springer, vol. 79(2), pages 111-134.
  19. Tesfatsion, Leigh S., 2008. "Agent-Based Computational Economics: Modeling Economies As Complex Adaptive Systems," Staff General Research Papers 12974, Iowa State University, Department of Economics.
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