Optimal Spatial Allocation of Labour Force and Employment Protection Legislation (EPL)

Gamito Carlos Coca () and Baltos Georgios ()
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Gamito Carlos Coca: European University Institute, Florence, Italy
Baltos Georgios: University of the Aegean, Chios, Greece and European Uiversity Institute, Florence, Italy

Bulletin of Geography. Socio-economic Series, 2019, vol. 45, issue 45, 45-58

Abstract: The paper introduces a model of how workers rationally decide to which country within an area of monetary and economic integration they will move for the purposes of living and working. Since Mundell accomplished his pivotal respective analyses, the Optimal Currency Area (OCA) literature has highlighted the importance of the reallocation of the labour force within common currency areas in order to cushion asymmetric shocks. However, several studies have put into question whether such a mobility may be considered adequately effective and efficient within the Euro Zone and, hence, political solutions have been urgently requested. This paper, using the concept of employment protection legislation (EPL), looks at the impact of the different flexibility degrees applied among national labour markets on the international labour movements within the Euro Zone, and it then proposes a reform of such in terms of the degrees of flexibility that could achieve the optimal point.

Keywords: Labour Economics; Applied Econometrics; Labour Mobility; Economic Integration; EPL (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:buogeo:v:45:y:2019:i:45:p:45-58:n:3

DOI: 10.2478/bog-2019-0023

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