Agglomeration, Congestion, and Regional Unemployment Disparities
Regional labor markets are characterized by huge disparities of unemployment rates. Models of the New Economic Geography explain how disparities of regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing a wage curve based on efficiency wages into the New Economic Geography. The model shows how disparities of regional goods and labor markets endogenously arise through the interplay of increasing returns to scale, transport costs, congestion costs, and migration. In result, the agglomeration pattern might be catastrophic or smooth depending on congestion costs. The transition between both patterns is smooth.
|Date of creation:||2011|
|Date of revision:|
|Publication status:||Forthcoming in|
|Contact details of provider:|| Postal: Universitätsstraße 25, 35037 Marburg|
Web page: http://www.uni-marburg.de/fb02/
More information through EDIRC
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.:
- Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2011.
"Trade and Labor Market Outcomes,"
NBER Working Papers
16662, National Bureau of Economic Research, Inc.
- Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2010. "Trade and Labor Market Outcomes," CEP Discussion Papers dp1028, Centre for Economic Performance, LSE.
- Helpman, Elhanan & Itskhoki, Oleg & Redding, Stephen J., 2011. "Trade and Labor Market Outcomes," CEPR Discussion Papers 8191, C.E.P.R. Discussion Papers.
- Hans-Friedrich Eckey & Reinhold Kosfeld & Alexander Werner, 2008. "Die Lohnkurve in Deutschland unter Berücksichtigung des regionalen Preisniveaus," MAGKS Papers on Economics 200810, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- Strauss-Kahn, Vanessa, 2005. "Firms' location decision across asymmetric countries and employment inequality," European Economic Review, Elsevier, vol. 49(2), pages 299-320, February.
- ZENOU, Yves & SMITH, Tony E., 1994.
"Efficiency Wages, Involuntary Unemployment and Urban Spatial Structure,"
CORE Discussion Papers
1994076, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Zenou, Yves & Smith, Tony E., 1995. "Efficiency wages, involuntary unemployment and urban spatial structure," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 547-573, August.
- Zenou, Y. & Smith, T. E., . "Efficiency wages, involuntary unemployment and urban spatial structure," CORE Discussion Papers RP 1171, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Blanchflower, D. & Oswald, A., 1989.
"The Wage Curve,"
340, London School of Economics - Centre for Labour Economics.
- Paul Krugman, 1990.
"Increasing Returns and Economic Geography,"
NBER Working Papers
3275, National Bureau of Economic Research, Inc.
- David G. Blanchflower & Andrew J. Oswald, 2005.
"The Wage Curve Reloaded,"
NBER Working Papers
11338, National Bureau of Economic Research, Inc.
- Peter Egger & Tobias Seidel, 2008. "Agglomeration and fair wages," Canadian Journal of Economics, Canadian Economics Association, vol. 41(1), pages 271-291, February.
- Decressin, Jorg & Fatas, Antonio, 1995.
"Regional labor market dynamics in Europe,"
European Economic Review,
Elsevier, vol. 39(9), pages 1627-1655, December.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Elhanan Helpman & Oleg Itskhoki, 2007.
"Labor Market Rigidities, Trade and Unemployment,"
NBER Working Papers
13365, National Bureau of Economic Research, Inc.
- Isabelle Méjean & Lise Patureau, 2008.
"Location decisions and Minimum Wages,"
THEMA Working Papers
2008-06, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Picard, Pierre M & Toulemonde, Eric, 2002.
"Firms Agglomeration and Unions,"
CEPR Discussion Papers
3323, C.E.P.R. Discussion Papers.
- Zierahn, Ulrich, 2011. "Regional unemployment and new economic geography," HWWI Research Papers 105, Hamburg Institute of International Economics (HWWI).
- Paolo Epifani & Gino Gancia, 2002.
"Trade, migration and regional unemployment,"
Economics Working Papers
832, Department of Economics and Business, Universitat Pompeu Fabra, revised Nov 2003.
- Víctor M. Montuenga-Gómez & José M. Ramos-Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.
- Baldwin, Richard E., 2001. "Core-periphery model with forward-looking expectations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 21-49, February.
- Peter Nijkamp & Jacques Poot, 2002.
"The Last Word on the Wage Curve?,"
Tinbergen Institute Discussion Papers
02-029/3, Tinbergen Institute, revised 13 Mar 2003.
- Eric Krassoi Peach & T. Stanley, 2009. "Efficiency Wages, Productivity and Simultaneity: A Meta-Regression Analysis," Journal of Labor Research, Springer, vol. 30(3), pages 262-268, September.
- Sato, Yasuhiro, 2000. "Search theory and the wage curve," Economics Letters, Elsevier, vol. 66(1), pages 93-98, January.
- Monfort, Philippe & Ottaviano, Gianmarco, 2002. "Spatial Mismatch and Skill Accumulation," CEPR Discussion Papers 3324, C.E.P.R. Discussion Papers.
- Antonio Ricci, Luca, 1999. "Economic geography and comparative advantage:: Agglomeration versus specialization," European Economic Review, Elsevier, vol. 43(2), pages 357-377, February.
- Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
- Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-43, September.
- Campbell, Carl & Orszag, J. Michael, 1998. "A model of the wage curve," Economics Letters, Elsevier, vol. 59(1), pages 119-125, April.
- Helpman, Elhanan & Itskhoki, Oleg, 2010. "Labour Market Rigidities, Trade and Unemployment," Scholarly Articles 25586655, Harvard University Department of Economics.
- John Francis, 2009. "Agglomeration, job flows and unemployment," The Annals of Regional Science, Springer, vol. 43(1), pages 181-198, March.
- Michael Pflüger, 2004. "Economic integration, wage policies, and social policies," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 135-150, January.
- Méjean, Isabelle & Patureau, Lise, 2010. "Firms' location decisions and minimum wages," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 45-59, January.
When requesting a correction, please mention this item's handle: RePEc:mar:magkse:201106. 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: (Bernd Hayo)
If references are entirely missing, you can add them using this form.