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Economic Integration and Labor Market Institutions: Worker Mobility, Earnings Risk, and Contract Structure

  • Ronnie Schoeb

    (University of Munich)

  • David E. Wildasin

    (University of Kentucky)

This paper investigates the effects of labor market integration, in the form of worker mobility, in a model with long-term labor contracts that lead to wage rigidities and unemployment. Increased mobility leads to more flexible labor market institutions in which firms can more easily vary the level of employment in response to fluctuations in demand. Economic integration is potentially Pareto-improving but, in the absence of a system of compensation, workers are harmed by greater labor mobility while the owners of firms benefit from higher profits.

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File URL: http://128.118.178.162/eps/lab/papers/0112/0112002.pdf
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Paper provided by EconWPA in its series Labor and Demography with number 0112002.

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Date of creation: 10 Dec 2001
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Handle: RePEc:wpa:wuwpla:0112002
Note: Type of Document - ; prepared on TeX; figures: request from author
Contact details of provider: Web page: http://128.118.178.162

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