Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86238
Authors: 
Longhi, Simonetta
Nijkamp, Peter
Poot, Jacques
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper 04-054/3
Abstract: 
Most ‘wage curve’ studies treat local labour markets as independent ‘islands’ in the national economy. However, when a local labour market is in close proximity of other labour markets, a local shock that increases unemployment may not lead to lower pay rates if employers fear outward migration of their workers. Hence, the unemployment elasticity of pay will be greater, the more isolated the local labour market is. Wages are also expected to be higher in regions that interact strongly with other regions. These hypotheses are confirmed by means of an estimation of wage curves with data for 327 regions of western Germany over the period 1990-97.
Subjects: 
Unemployment
wage formation
spatial analysis
local monopsony
Germany
JEL: 
J21
J30
R23
Document Type: 
Working Paper

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