Geographical mobility and the labour market

Cecilia Vives

No 15485, IKERLANAK from Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I

Abstract: This paper studies the e ect of home-owners' migration costs on migration and unemployment in an economy where workers move both for work- and nonwork- related reasons. To this end, a search model with heterogeneous locations is developed and calibrated to the U.S. economy. Consistent with the empirical evidence, the model predicts that home-owners have a lower unemployment rate than renters despite their higher migration costs. The result is due to home-owners' higher transition rate to employment and lower transition rate to unemployment.In addition, the model generates lower inequality in home-owners' local unemployment rates than in renters'. In line with this result, it is documented that, for the period 1996-2013, home-owners had less unemployment dispersion across metropolitan areas than renters.

Keywords: home-ownership; unemployment; labour; mobility (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-dge, nep-geo and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ehu:ikerla:15485

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Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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