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http://hdl.handle.net/10419/35453
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| Title: | | Housing and the labor market: time to move and aggregate unemployment  |
| Authors: | | Rupert, Peter Wasmer, Etienne |
| Issue Date: | | 2009 |
| Series/Report no.: | | IZA discussion papers 4172 |
| Abstract: | | The Mortensen-Pissarides model with unemployment benefits and taxes has been able to account for the variation in unemployment rates across countries but does not explain why geographical mobility is very low in some countries (on average, three times lower in Europe than in the U.S.). We build a model in which both unemployment and mobility rates are endogenous. Our findings indicate that an increase in unemployment benefits and in taxes does not generate a strong decline in mobility and accounts for only half to two-thirds of the difference in unemployment from the US to Europe. We find that with higher commuting costs the effect of housing frictions plays a large role and can generate a substantial decline in mobility. We show that such frictions can account for the differences in unemployment and mobility between the US and Europe. |
| Subjects: | | Unemployment housing market imperfections labor search frictions commuting costs |
| JEL: | | J30 J60 R20 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-2009060842 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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