Matching and sorting across regions

Chiara Lacava

No 44/21, ICIR Working Paper Series from Goethe University Frankfurt, International Center for Insurance Regulation (ICIR)

Abstract: I measure the effects of workers' mobility across regions of different productivity through the lens of a search and matching model with heterogeneous workers and firms estimated with administrative data. In an application to Italy, I find that reallocation of workers to the most productive region boosts productivity at the country level but amplifies differentials across regions. Employment rates decline as migrants foster job competition, and inequality between workers doubles in less productive areas since displacement is particularly severe for low-skill workers. Migration does affect mismatch: mobility favors co-location of agents with similar productivity but within-region rank correlation declines in the most productive region. I show that worker-firm complementarities in production account for 33% of the productivity gains. Place-based programs directed to firms, like incentives for hiring unemployed or creating high productivity jobs, raise employment rates and reduce the gaps in productivity across regions. In contrast, subsidies to attract high-skill workers in the South have limited effects.

Keywords: cross-regional mobility; mismatch; search-matching; sorting; productivity differentials (search for similar items in EconPapers)
JEL-codes: J61 J64 R13 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-bec, nep-dge, nep-eur, nep-geo, nep-hrm, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/247674/1/1782086374.pdf (application/pdf)

Related works:
Journal Article: Matching and sorting across regions (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:icirwp:4421

Access Statistics for this paper

More papers in ICIR Working Paper Series from Goethe University Frankfurt, International Center for Insurance Regulation (ICIR) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().