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Big locational unemployment differences despite high labor mobility

Title:

Big locational unemployment differences despite high labor mobility

Lkhagvasuren, Damba (2012) Big locational unemployment differences despite high labor mobility. Journal of Monetary Economics, 59 (8). pp. 798-814. ISSN 03043932

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Official URL: http://dx.doi.org/10.1016/j.jmoneco.2012.10.004

Abstract

Considerable labor mobility exists across US states, enough that, if migration arbitrages local unemployment, one might expect very low unemployment differences across states. However, cross-state data reveal large unemployment differences. An equilibrium multi-location model with stochastic worker-location match productivity and within-location trading frictions can account for these facts. In the model, some workers move to, or stay in, a location with high unemployment because they are more productive there than elsewhere. According to the model, labor mobility and aggregate unemployment are negatively related. This prediction is in stark contrast to standard sectoral reallocation theory, but consistent with the US data.

Divisions:Concordia University > Faculty of Arts and Science > Economics
Item Type:Article
Refereed:Yes
Authors:Lkhagvasuren, Damba
Journal or Publication:Journal of Monetary Economics
Date:2012
Digital Object Identifier (DOI):10.1016/j.jmoneco.2012.10.004
ID Code:978237
Deposited By: DAVID MACAULAY
Deposited On:23 Jan 2014 15:46
Last Modified:18 Jan 2018 17:46
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