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Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach

Author

Listed:
  • Yenhuang Chen

    (Chinese Culture University)

  • Lihong Zhao

    (China HuanQiu Contracting & Engineering Corporation)

Abstract

This paper uses a new economic geography approach to examine the effects of wage subsidy, which is undertake to bolster up the industrial development. This paper also highlights the effects of trade liberalization and international capital mobility. In particular, sector-specific unemployment is introduced in the monopolistically competitive sector of the home country.

Suggested Citation

  • Yenhuang Chen & Lihong Zhao, 2009. "Wage Subsidy and Sector-Specific Unemployment: A New Economic Geography Approach," Economics Bulletin, AccessEcon, vol. 29(1), pages 426-436.
    • Handle: RePEc:ebl:ecbull:eb-08f20004
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I1-P44.pdf
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    References listed on IDEAS

    as
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    9. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    10. R. D. Husby, 1993. "The Minimum Wage, Wage Subsidies, And Poverty," Contemporary Economic Policy, Western Economic Association International, vol. 11(3), pages 30-38, July.
    11. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
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    Cited by:

    1. Zierahn, Ulrich, 2012. "Monocentric cities, endogenous agglomeration, and unemployment disparities," HWWI Research Papers 130, Hamburg Institute of International Economics (HWWI).
    2. Ulrich Zierahn, 2013. "Agglomeration, congestion, and regional unemployment disparities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 435-457, October.
    3. Zierahn, Ulrich, 2011. "Regional unemployment and new economic geography," HWWI Research Papers 105, Hamburg Institute of International Economics (HWWI).

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    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business

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