A Positive Theory of Geographic Mobility and Social Insurance

Fabrizio Zilibotti, John Hassler, Kjetil Storesletten and Rodríguez Mora, José V
Authors registered in the RePEc Author Service: Sevi Rodríguez Mora

No 2964, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper presents a tractable dynamic general equilibrium model that can explain cross-country empirical regularities in geographical mobility, unemployment and labour market institutions. Rational agents vote over unemployment insurance (UI), taking the dynamic distortionary effects of insurance on the performance of the labour market into consideration. Agents with higher cost of moving, i.e. more attached to their current location, prefer more generous UI. The key assumption is that an agent?s attachment to a location increases the longer they have resided there. UI reduces the incentive for labour mobility and increases, therefore, the fraction of attached agents and the political support for UI. The main result is that this self-reinforcing mechanism can give rise to multiple steady-states one ?European? steady-state featuring high unemployment, low geographical mobility and high unemployment insurance, and one ?American? steady-state featuring low unemployment, high mobility and low unemployment insurance.

Keywords: Employment; Migration; Geographical mobility; Political equilibrium; Unemployment insurance; Voting (search for similar items in EconPapers)
JEL-codes: D72 E24 J24 J64 J65 (search for similar items in EconPapers)
Date: 2001-09
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://cepr.org/publications/DP2964 (application/pdf)

Related works:
Working Paper: A Positive Theory of Geographic Mobility and Social Insurance (2015)
Journal Article: A POSITIVE THEORY OF GEOGRAPHIC MOBILITY AND SOCIAL INSURANCE (2005)
Working Paper: A Positive Theory of Geographic Mobility and Social Insurance (2002)
Working Paper: A positive theory of geographical mobility and social insurance (2002)
Working Paper: A positive theory of geographic mobility and social insurance (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2964

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP2964

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().