The Search Equilibrium Approach to Migration and Labor Market

Chuhwan Park
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Chuhwan Park: ETRI

Korean Economic Review, 2001, vol. 17, 81-98

Abstract: This paper looks at the relation between migration and labor market parameters in search equilibrium model upon which a steady-state analysis can be based. We define and characterize the properties of steady-state equilibrium according to several conditions that we assume to be present in the process of migration from rural to urban sectors. The main implication of this study is the suggestion that, in the absence of urban-to-rural migration, the urban sector may have a higher unemployment rate with higher productivity differentials between urban and rural sectors. However, unemployment rates may drop for the urban sector as a result of increases in a firm's output level, which increases gross income along with a firm's entry cost.

Keywords: search equilibrium; migration; stochastic matching rate; symmetric Nash bargain (search for similar items in EconPapers)
JEL-codes: J3 J6 R0 (search for similar items in EconPapers)
Date: 2001
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