Wage Formation, Regional Migration and Local Labour Market Tightness

Kåre Johansen (), Fredrik Carlsen and Knut Røed ()

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: Economic theory predicts that local labour market tightness affects local wage setting as well as individuals’ migration decisions. But how should we measure local labour market tightness? In this paper we show that the common practice of using the local rate of unemployment as the tightness indicator may be misplaced. Instead, we propose a human capital adjusted outflow rate from unemployment that can be computed on the basis of micro register data. This outflow rate performs better than traditional measures of regional labour market conditions in panel data analyses of regional wages and interregional migration.

Keywords: Regional wages; interregional migration; labour market tightness (search for similar items in EconPapers)
JEL-codes: J31 J61 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2003-02-14
New Economics Papers: this item is included in nep-afr, nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://www.svt.ntnu.no/iso/WP/2003/3Outflow200103.pdf (application/pdf)

Related works:
Journal Article: Wage Formation, Regional Migration and Local Labour Market Tightness* (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:2903

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