Trade, migration and regional unemployment

Paolo Epifani, Gino A. Gancia

Research output: Journal PublicationArticlepeer-review

40 Citations (Scopus)

Abstract

A by now large literature in regional economics has greatly improved our understanding of the determinants of the observed spatial disparities in productivity. However, this literature neglects what seems to be a robust and persistent fact accompanying regional productivity differences: high productivity regions also have lower unemployment than low productivity regions. In this paper, we set out a model in the New Economic Geography (NEG)/job search tradition to explore the theoretical determinants of this fact. We find that the same forces producing regional agglomeration and productivity differences also generate persistent unemployment disparities. Moreover, we highlight a contrast between the short-run and long-run effects of migration on regional unemployment. In particular, migration from the periphery to the core may reduce unemployment disparities in the short-run, but exacerbates them in the long-run.

Original languageEnglish
Pages (from-to)625-644
Number of pages20
JournalRegional Science and Urban Economics
Volume35
Issue number6
DOIs
Publication statusPublished - Nov 2005
Externally publishedYes

Keywords

  • Agglomeration
  • Labor mobility
  • Regional disparities
  • Search frictions
  • Transport costs

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies

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