Housing and the Labor Market: Time to Move and Aggregate Unemployment
The Mortensen-Pissarides model with unemployment benefits and taxes has been able to account for the variation in unemployment rates across countries but does not explain why geographical mobility is very low in some countries (on average, three times lower in Europe than in the U.S.). We build a model in which both unemployment and mobility rates are endogenous. Our findings indicate that an increase in unemployment benefits and in taxes does not generate a strong decline in mobility and accounts for only half to two-thirds of the difference in unemployment from the US to Europe. We find that with higher commuting costs the effect of housing frictions plays a large role and can generate a substantial decline in mobility. We show that such frictions can account for the differences in unemployment and mobility between the US and Europe.
|Date of creation:||May 2009|
|Date of revision:|
|Publication status:||published in: Journal of Monetary Economics, Carnegie-NYU-Rochester Conference Issue, 2012, 59 (1), 24-36|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Damien Gaumont & Martin Schindler & Randall Wright, 2005.
"Alternative Theories of Wage Dispersion,"
PIER Working Paper Archive
05-017, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Rupert, Peter & Stancanelli, Elena G. F. & Wasmer, Etienne, 2009.
"Commuting, Wages and Bargaining Power,"
IZA Discussion Papers
4510, Institute for the Study of Labor (IZA).
- Rupert, Peter & Stancanelli, Elena G F & Wasmer, Etienne, 2009. "Commuting, Wages and Bargaining Power," University of California at Santa Barbara, Economics Working Paper Series qt1wf7x3rg, Department of Economics, UC Santa Barbara.
- Peter Rupert & Elena Stancanelli & Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," THEMA Working Papers 2009-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Peter Rupert & Elena Stancanelli & Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," Working Papers hal-00972825, HAL.
- Elena Stancanelli & Peter Rupert & Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," Sciences Po publications 2009-02, Sciences Po.
- Fujita,Masahisa, 1989.
"Urban Economic Theory,"
Cambridge University Press, number 9780521346627.
- repec:adr:anecst:y:2009:i:95-96:p:11 is not listed on IDEAS
- Leiderman,Leonardo & Razin,Assaf (ed.), 2010. "Capital Mobility," Cambridge Books, Cambridge University Press, number 9780521142731.
- Wasmer, Etienne & Zenou, Yves, 2002. "Does City Structure Affect Job Search and Welfare?," Journal of Urban Economics, Elsevier, vol. 51(3), pages 515-541, May.
- Mortensen, Dale T. & Pissarides, Christopher A., 1999.
"New developments in models of search in the labor market,"
Handbook of Labor Economics,
in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627
- Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers.
- Edward C. Prescott, 2003.
"Why do Americans work so much more than Europeans?,"
321, Federal Reserve Bank of Minneapolis.
- Edward C. Prescott, 2004. "Why do Americans work so much more than Europeans?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
- Edward C. Prescott, 2004. "Why do Americans Work so Much More than Europeans?," NBER Working Papers 10316, National Bureau of Economic Research, Inc.
- Edward C. Prescott, 2004. "Why Do Americans Work So Much More Than Europeans?," Levine's Bibliography 122247000000000413, UCLA Department of Economics.
- Ommeren, Jos van & Berg, Gerard J. van den & Gorter, Cees, 1998.
"Estimating the marginal willingness to pay for commuting,"
Serie Research Memoranda
0046, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Jos van Ommeren & Gerard J. van den Berg & Cees Gorter, 2000. "Estimating the Marginal Willingness to Pay for Commuting," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 541-563.
- Rogers, Cynthia L., 1997. "Job Search and Unemployment Duration: Implications for the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 42(1), pages 109-132, July.
- Zax, J.S. & Kain, J.F., 1991.
"Moving to the Suburbs: Do Relocating Companies Leave Their Black Employees Behind?,"
Harvard Institute of Economic Research Working Papers
1562, Harvard - Institute of Economic Research.
- Zax, Jeffrey S & Kain, John F, 1996. "Moving to the Suburbs: Do Relocating Companies Leave Their Black Employees Behind?," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 472-504, July.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp4172. 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: (Mark Fallak)
If references are entirely missing, you can add them using this form.