Agglomeration, Congestion, and Regional Unemployment Disparities

Agglomeration, Congestion, and Regional Unemployment Disparities

Regional labor markets are characterized by huge disparities of unemployment rates. Models of the New Economic Geography explain how disparities of regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing a wa...

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Veröffentlicht in:MAGKS - Joint Discussion Paper Series in Economics (Band 06-2011)
1. Verfasser: Zierahn, Ulrich
Format: Arbeit
Sprache:Englisch
Veröffentlicht: Philipps-Universität Marburg 2011
Schlagworte:
Wirtschaft
wage curve, labor migration
regional unemployment
core-periphery
New Economic Geography
Economics
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Zusammenfassung:Regional labor markets are characterized by huge disparities of unemployment rates. Models of the New Economic Geography explain how disparities of regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing a wage curve based on efficiency wages into the New Economic Geography. The model shows how disparities of regional goods and labor markets endogenously arise through the interplay of increasing returns to scale, transport costs, congestion costs, and migration. In result, the agglomeration pattern might be catastrophic or smooth depending on congestion costs. The transition between both patterns is smooth.
Umfang:32 Seiten
ISSN:1867-3678
DOI:10.17192/es2024.0072

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