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Labour Market Integration, Human Capital Formation, and Mobility

Alexander Haupt () and Silke Uebelmesser ()

No 2014-020, Jena Economic Research Papers from Friedrich-Schiller-University Jena

Abstract: In this paper, we analyse the implications of labour market integration in a two-region model with local human capital externalities and congestion eects. We show that integration can be a double-edged sword. Integration and the ensuing agglomeration of skilled labour can reduce 'real' income in both regions. Even if there is a 'winning' region, human capital and real income in the two regions together might decline (but need not). However, integration can increase total real income even if it depresses human capital formation. We further explore how the degree of labour mobility and the strength of the congestion eects shape the impact of integration on human capital and income.

Keywords: Human capital; migration; labour market integration; agglomeration (search for similar items in EconPapers)
JEL-codes: F22 R23 J24 R12 (search for similar items in EconPapers)
Date: 2014-08-19
New Economics Papers: this item is included in nep-geo, nep-hrm, nep-lab, nep-mig and nep-ure
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