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On the Interaction between Unemployment and Inter-regional Mobility

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This paper aims at examining the interaction between unemployment and inter-regional mobility in the presence of asymmetric productivity shocks. We present an intertemporal two-regions equilibrium model where unemployed workers can migrate from one region to another. The hiring process is represented by a matching function à la Pissarides. We also analyse the wage setting procedure by introducing Nash bargaining between firms and employees. We compare two extremely different scenarios. The case where there is no mobility with unemployment persistence versus the same economy where perfect mobility is assumed. This paper also studied different types of asymmetries such as changes in "unemployment benefits" and/or the cost of posting vacancies. We show the importance of these changes to explain regional unemployment disparities.Finally, we calibrate the model for Spain and we analyse the relevance of the model in explaining regional disparities and inter-regional labour force mobility

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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 105.

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Date of creation: 01 Sep 2003
Handle: RePEc:sef:csefwp:105
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  1. Gilles Saint-Paul, 1994. "Are the Unemployed Unemployable?," IMF Working Papers 94/64, International Monetary Fund.
  2. Marco Manacorda & Barbara Petrongolo, 1998. "Regional imbalances and aggregate performance in a leading sector model of the labour market: an analysis of Italian data 1977-1991," LSE Research Online Documents on Economics 3664, London School of Economics and Political Science, LSE Library.
  3. Burda, Michael C. & Profit, Stefan, 1996. "Matching across space: Evidence on mobility in the Czech Republic," Labour Economics, Elsevier, vol. 3(3), pages 255-278, October.
  4. 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.
  5. Diego Puga, 1999. "Unemployment clusters across Europe's regions and countries," Working Papers dpuga-99-03, University of Toronto, Department of Economics.
  6. Pissarides, Christopher A & Wadsworth, Jonathan, 1989. "Unemployment and the Inter-regional Mobility of Labour," Economic Journal, Royal Economic Society, vol. 99(397), pages 739-755, September.
  7. Bover, Olympia & Velilla, Pilar, 1999. "Migration in Spain: Historical Background and Current Trends," IZA Discussion Papers 88, Institute for the Study of Labor (IZA).
  8. Jackman, Richard & Savouri, Savvas, 1992. "Regional Migration in Britain: An Analysis of Gross Flows Using NHS Central Register Data," Economic Journal, Royal Economic Society, vol. 102(415), pages 1433-1450, November.
  9. Greenwood, Michael J, 1975. "Research on Internal Migration in the United States: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(2), pages 397-433, June.
  10. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
  11. DaVanzo, Julie, 1978. "Does Unemployment Affect Migration?-Evidence from Micro Data," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 504-514, November.
  12. Juan J. Dolado & Juan F. Jimeno & Rosa Duce, "undated". "The effects of migration on the relative demand of skilled versus unskilled labour: Evidence from Spain," Working Papers 96-20, FEDEA.
  13. Cahuc, Pierre & Wasmer, Etienne, 2001. "Does Intrafirm Bargaining Matter In The Large Firm'S Matching Model?," Macroeconomic Dynamics, Cambridge University Press, vol. 5(05), pages 742-747, November.
  14. Marimon, Ramon & Zilibotti, Fabrizio, 1998. "'Actual' versus 'virtual' employment in Europe Is Spain different?," European Economic Review, Elsevier, vol. 42(1), pages 123-153, January.
  15. Antolin, Pablo & Bover, Olympia, 1997. "Regional Migration in Spain: The Effect of Personal Characteristics and of Unemployment, Wage and House Price Differentials Using Pooled Cross-Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 215-235, May.
  16. Boucekkine, Raouf, 1995. "An alternative methodology for solving nonlinear forward-looking models," Journal of Economic Dynamics and Control, Elsevier, vol. 19(4), pages 711-734, May.
  17. Carlo Devillanova & Walter Garcia Fontes, 1998. "Migration across Spanish provinces: Evidence from the social security records (1978-1992)," Economics Working Papers 318, Department of Economics and Business, Universitat Pompeu Fabra.
  18. Boeri, Tito & Scarpetta, Stefano, 1996. "Regional mismatch and the transition to a market economy," Labour Economics, Elsevier, vol. 3(3), pages 233-254, October.
  19. 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.
  20. Abowd, John M. & Kramarz, Francis, 2003. "The costs of hiring and separations," Labour Economics, Elsevier, vol. 10(5), pages 499-530, October.
  21. Manon Domingues Dos Santos, 1998. "Intégration économique, migrations et chômage," Revue Économique, Programme National Persée, vol. 49(5), pages 1269-1292.
  22. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
  23. repec:cup:macdyn:v:5:y:2002:i:05:p:742-747_03 is not listed on IDEAS
  24. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
  25. Juillard, Michel, 1996. "Dynare : a program for the resolution and simulation of dynamic models with forward variables through the use of a relaxation algorithm," CEPREMAP Working Papers (Couverture Orange) 9602, CEPREMAP.
  26. Samuel Bentolila, "undated". "Internal migration in Spain," Working Papers 2001-07, FEDEA.
  27. Jackman, R & Layard, Richard & Pissarides, C, 1989. "On Vacancies," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(4), pages 377-394, November.
  28. Pablo Antolín, 1994. "International migration flows: The case of Spain (1960-1988)," Working Papers. Serie EC 1994-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  29. Hughes, Gordon & McCormick, Barry, 1981. "Do Council Housing Policies Reduce Migration between Regions?," Economic Journal, Royal Economic Society, vol. 91(364), pages 919-937, December.
  30. Jacob Mincer, 1977. "Family Migration Decisions," NBER Working Papers 0199, National Bureau of Economic Research, Inc.
  31. Ortega, Javier, 2000. "Pareto-Improving Immigration in an Economy with Equilibrium Unemployment," Economic Journal, Royal Economic Society, vol. 110(460), pages 92-112, January.
  32. Pissarides, Christopher A & McMaster, Ian, 1990. "Regional Migration, Wages and Unemployment: Empirical Evidence and Implications for Policy," Oxford Economic Papers, Oxford University Press, vol. 42(4), pages 812-831, October.
  33. Francisco J. Gil & Maria Jesus Martin & Angel Serrat, 1994. "Movilidad en el mercado de trabajo en España: un análisis econométrico de duración con riesgos en competencia," Investigaciones Economicas, Fundación SEPI, vol. 18(3), pages 517-537, September.
  34. Andolfatto, David, 1996. "Business Cycles and Labor-Market Search," American Economic Review, American Economic Association, vol. 86(1), pages 112-132, March.
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