Productivity growth, industry location patterns and labor market frictions

Arbeitspapier

This paper constructs a two-country model of international trade to study how labor market frictions affect industry location patterns, unemployment rates, and fully endogenous productivity growth. We show that when the larger country offers subsidies to labor search costs or reduces unemployment benefits, the domestic unemployment rate falls, causing greater industry concentration and faster productivity growth, but higher unemployment for the smaller country. When similar labor market policies are implemented in the smaller country, however, the resulting fall in domestic unemployment leads to lower industry concentration and slower productivity growth, while lowering unemployment in the larger country.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 1052

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Unemployment: Models, Duration, Incidence, and Job Search ; One, Two, and Multisector Growth Models ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
• Subject: Labor market frictions ; Industry location ; Imperfect knowledge spillovers ; Endogenous productivity growth

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Davis, Colin R. ; Hashimoto, Ken-ichi
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/230459
• Last update: 10.03.2025, 11:45 AM CET