Modelling regional labour market dynamics. Participation, employment and migration decisions in a spatial CGE model for the EU

Damiaan Persyn, d'Artis Kancs and Wouter Torfs

No JRC89537, JRC Research Reports from Joint Research Centre

Abstract: This paper outlines how regional labour market adjustments to macro-economic and policy shocks are modelled in RHOMOLO through participation, employment and migration decisions of workers. RHOMOLO, being a multi-sectoral, inter-regional general equilibrium model, is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore constrained by the tractability and computational solvability of the model. The labour market module consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). Unemployment is determined through a wage curve and inter-regional labour migration decisions are modelled in a discrete-choice framework, with backward-looking expectations.

Keywords: Participation; unemployment; labour migration; wage curve; CGE; new economic geography (search for similar items in EconPapers)
JEL-codes: C68 D58 F22 J20 J61 J64 O15 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2014-12
New Economics Papers: this item is included in nep-cmp, nep-eur, nep-geo, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Journal Article: Modelling regional labour market dynamics: Participation, employment and migration decisions in a spatial CGE model for the EU (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:iptwpa:jrc89537

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