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Externalities from Labor Mobility

Laurence Ball ()

No 3720, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper assumes that workers can move from a market with high unemployment to one with low unemployment at a cost. In principle. equilibrium mobility can be greater or less than the social optimum. For most plausible parameter values. however. mobility is too low. Intuitively. mobility has a beneficial externality: it helps workers remaining in the high-unemployment market by reducing competition for jobs. Mobility hurts workers in the market that movers join, but this effect is usually smaller.

Date: 1991-05
Note: EFG
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