Regional Wage and Employment Responses to Market Potential in the EU

Keith Head and Thierry Mayer

No 3, Bruges European Economic Research Papers from European Economic Studies Department, College of Europe

Abstract: Recent theoretical work on economic geography emphasizes the interplay of transport costs and plant-level increasing returns. In these models, the spatial distribution of demand is a key determinant of economic outcomes. In one strand, it is argued that higher demand gives rise to a more than proportionate increase in production, a result known as the home market effect. Another strand emphasizes the effects of market sizes on factor prices. We highlight the theoretical connection between these two strands. Using data on 57 European regions, we show how wages and employment respond to differentials in what we call real market potential, a discounted sum of demands derived from the theory.

Keywords: public-private partnership; economic regulation, water utilities JEL codes: L22, L33, L95 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2005-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Regional wage and employment responses to market potential in the EU (2006)
Working Paper: Regional Wage and Employment Responses to Market Potential in the EU (2006)
Working Paper: Regional Wage and Employment Responses to Market Potential in the EU (2006)
Working Paper: Regional Wage and Employment Responses to Market Potential in the EU (2006)
Working Paper: Regional wage and employment responses to market potential in the EU (2006)
Working Paper: Regional Wage and Employment Responses to Market Potential in the EU (2006)
Working Paper: Regional Wage and Employment Responses to Market Potential in the EU (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:coe:wpbeer:3

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