Local unemployment and specialisation

Arbeitspapier

Recent empirical work has shown that there exists a negative relation between wages and unemployment estimated across regions. Our model recognises the spatial dimension of the so-called wage curve by using a Hotelling/Salop framework in which a finite number of firms compete for heterogeneous workers. We incorporate this set-up into an efficiency-wage framework. In setting wages firms perceive their influenae on the wage-unemployment trade-off, thus taking the employment decisions of their competitors as an externality. The model predicts that in larger local labour markets with firms demanding more specialised labour, workers receive higher wages and face lower unemployment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tübinger Diskussionsbeiträge ; No. 135

Classification and Topics

• Classification: Wirtschaft ; Labor Force and Employment, Size, and Structure ; Labor Contracts ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: specialization and heterogeneity of labour ; efficiency wages ; local unemployment ; Regionaler Arbeitsmarkt ; Arbeitsmarkttheorie ; Effizienzlohn ; Arbeitsteilung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ritter, Peer ; Walz, Uwe
• Event: Veröffentlichung
• (who): Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät
• (where): Tübingen
• (when): 1998

Further information

• Handle: http://hdl.handle.net/10419/104894
• Last update: 10.03.2025, 11:44 AM CET