Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/48272
Authors: 
Zierahn, Ulrich
Year of Publication: 
2011
Series/Report no.: 
HWWI Research Paper 108
Abstract: 
Regional labor markets are characterized by huge disparities between unemployment rates. Models of the New Economic Geography explain how disparities between regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing a wage curve based on efficiency wages into the New Economic Geography. The model shows how disparities between regional goods and labor markets endogenously arise through the interplay of increasing returns to scale, transport costs, congestion costs, and migration. The level and stability of regional labor market disparities depends on the extend of labor market frictions.
Subjects: 
regional unemployment
New Economic Geography
core-periphery
wage curve
labor migration
JEL: 
J64
R12
R23
Document Type: 
Working Paper

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