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Externalities from Labor Mobility

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  • Laurence Ball

Abstract

This paper assumes that workers can move from a market with high unemployment to one with low unemployment at a cost. In principle. equilibrium mobility can be greater or less than the social optimum. For most plausible parameter values. however. mobility is too low. Intuitively. mobility has a beneficial externality: it helps workers remaining in the high-unemployment market by reducing competition for jobs. Mobility hurts workers in the market that movers join, but this effect is usually smaller.

Suggested Citation

  • Laurence Ball, 1991. "Externalities from Labor Mobility," NBER Working Papers 3720, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3720 Note: EFG
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    1. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, January.
    2. Pissarides, Christopher A, 1984. "Search Intensity, Job Advertising, and Efficiency," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 128-143, January.
    3. Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-979, December.
    4. Oliver Jean Blanchard & Peter Diamond, 1989. "The Beveridge Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1), pages 1-76.
    5. Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 279-298.
    6. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
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