On the Interaction between Unemployment and Inter-regional Mobility

Raquel Fonseca ()

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper aims at examining the interaction between unemployment and inter-regional mobility in the presence of asymmetric productivity shocks. We present an intertemporal two-regions equilibrium model where unemployed workers can migrate from one region to another. The hiring process is represented by a matching function à la Pissarides. We also analyse the wage setting procedure by introducing Nash bargaining between firms and employees. We compare two extremely different scenarios. The case where there is no mobility with unemployment persistence versus the same economy where perfect mobility is assumed. This paper also studied different types of asymmetries such as changes in "unemployment benefits" and/or the cost of posting vacancies. We show the importance of these changes to explain regional unemployment disparities.Finally, we calibrate the model for Spain and we analyse the relevance of the model in explaining regional disparities and inter-regional labour force mobility

Keywords: Migration; Unemployment; Nash bargaining (search for similar items in EconPapers)
JEL-codes: J51 J61 R23 (search for similar items in EconPapers)
Date: 2003-09-01
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:105

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