Integration, Agglomeration and the Political Economics of Factor Mobility

Gianmarco Ottaviano and Jacques Thisse

Economics Working Papers from European University Institute

Abstract: This paper tackles the issue of the optimality of agglomeration in a two-region economy with skilled/mobile and unskilled/immobile workers. The market leads to the optimal outcome when transport costs are high or low. However, for intermediate values, it yields agglomeration whereas dispersion is socially desirable. We show that competitive lobbying on factor mobility by the two groups of workers sustains the second best optimum.

Keywords: ECONOMIC INTEGRATION; POLITICS; LABOUR MIGRATION; LABOUR MOBILITY (search for similar items in EconPapers)
JEL-codes: F15 J61 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1999
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Integration, agglomeration and the political economics of factor mobility (2002)
Working Paper: Integration, agglomeration and the political economics of factor mobility (2002)
Working Paper: Integration, Agglomeration and the Political Economics of Factor Mobility (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco99/27

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