Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26164
Authors: 
Eggert, Wolfgang
Krieger, Tim
Meier, Volker
Year of Publication: 
2007
Series/Report no.: 
CESifo working paper 2119
Abstract: 
This paper studies a two-region model in which unemployment, education decisions and interregional migration are endogenous. The poorer region exhibits both lower wages and higher unemployment rates, and migrants to the richer region are disproportionally skilled. The brain drain from the poor to the rich region is accompanied by stronger incentives to acquire skills even for immobile workers. Regional shocks tend to affect both regions in a symmetric fashion, and skilled-biased technological change reduces wages of the unskilled. Both education and migration decisions are distorted by a uniform unemployment compensation, which justifies a corrective subsidization.
Subjects: 
education
unemployment
interregional migration
externalities
brain drain
JEL: 
H23
I20
J61
J64
R10
Document Type: 
Working Paper

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