Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/25087 
Authors: 
Year of Publication: 
2006
Series/Report no.: 
SFB 649 Discussion Paper No. 2006,004
Publisher: 
Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk, Berlin
Abstract: 
Fifteen years after German reunification, the facts about slow regional convergence have born out the prediction of Barro (1991), except that migration out of East Germany has not slowed down. I document that in particular the 18-29 year old are leaving East Germany, and that the emigration has accelerated in recent years. To understand these patterns, I provide an extension of the standard labor search model by allowing for migration and network externalities. In that theory, two equilibria can result: one with a high networking rate, high average labor productivity, low unemployment and no emigration (West Germany) and one with a low networking rate, low average labor productivity, high unemployment and a constant rate of emigration (East Germany). The model does not imply any obviously sound policies to move from the weakly networked equilibrium to the highly networked equilibrium.
Subjects: 
German reunification
labor market search
network externalities
migration
regional economics
Document Type: 
Working Paper

Files in This Item:
File
Size
487.59 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.