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Education, unemployment and migration

Author

Listed:
  • Eggert, Wolfgang
  • Krieger, Tim
  • Meier, Volker

Abstract

This paper studies a two-region model in which unemployment, education decisions and interregional migration are endogenous. The poorer region exhibits both lower wages and higher unemployment rates, and migrants to the richer region are disproportionally skilled. The brain drain from the poor to the rich region is accompanied by stronger incentives to acquire skills even for immobile workers. Regional shocks tend to affect both regions in a symmetric fashion, and skill-biased technological change reduces wages of the unskilled. Both education and migration decisions are distorted by a uniform unemployment compensation, which justifies a corrective subsidization.

Suggested Citation

  • Eggert, Wolfgang & Krieger, Tim & Meier, Volker, 2010. "Education, unemployment and migration," Munich Reprints in Economics 20561, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:20561
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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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