The Impact of Labor Markets on Emergence and Persistence of Regional Asymmetries

Pierre Picard and Eric Toulemonde

No 248, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates the impact of labor markets and economies of agglomeration on firms location. We show that the existence of a lower bound on wage (e.g. a minimum wage or a reservation wage) introduces asymmetric location of firms. Moreover, changes in that lower bound or in global product demand may induce irreversible changes in location equilibria. Asymmetries in firms location may thus emerge and persist.

Keywords: persistence; Firms location; wages (search for similar items in EconPapers)
JEL-codes: J23 R30 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2001-01
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (3)

Published - published in: Journal of Urban Economics, 2004, 55 (3), 458-477

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