IDEAS home Printed from https://ideas.repec.org/a/fip/fedlrv/y2000imarp1-10nv.82no.2.html
   My bibliography  Save this article

The revealed cost of unemployment

Author

Listed:
  • Stratford Douglas
  • Howard J. Wall

Abstract

The costs of unemployment usually are stated in terms of the amount of aggregate income that is foregone because of resources left idle. Although useful, this method does not provide all of the information necessary for normative analysis. In this article, Stratford Douglas and Howard J. Wall propose an alternative that measures the cost of regional and national unemployment by the amount that people would be willing to pay to avoid it. The authors' model treats unemployment as a region-specific disamenity, and uses regional cross-migration data to reveal preferences towards income and unemployment.

Suggested Citation

  • Stratford Douglas & Howard J. Wall, 2000. "The revealed cost of unemployment," Review, Federal Reserve Bank of St. Louis, vol. 82(Mar), pages 1-10.
    • Handle: RePEc:fip:fedlrv:y:2000:i:mar:p:1-10:n:v.82no.2
    as

    Download full text from publisher

    File URL: https://files.stlouisfed.org/files/htdocs/publications/review/00/03/0003sd.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    2. Clark, Kenneth & Leslie, Derek & Symons, Elizabeth, 1994. "The Costs of Recession," Economic Journal, Royal Economic Society, vol. 104(422), pages 20-36, January.
    3. Imrohoruglu, Ayse, 1989. "Cost of Business Cycles with Indivisibilities and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1364-1383, December.
    4. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    5. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    6. Greenwood, Michael J, et al, 1991. "Migration, Regional Equilibrium, and the Estimation of Compensating Differentials," American Economic Review, American Economic Association, vol. 81(5), pages 1382-1390, December.
    7. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    8. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(3), pages 369-410.
    9. Jim Dolmas, 1998. "Risk Preferences and the Welfare Cost of Business Cycles," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 646-676, July.
    10. Kathleen M. Day, 1992. "Interprovincial Migration and Local Public Goods," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 123-144, February.
    11. Lindbeck, Assar & Snower, Dennis J, 1986. "Wage Setting, Unemployment, and Insider-Outsider Relations," American Economic Review, American Economic Association, vol. 76(2), pages 235-239, May.
    12. Ghatak, Subrata & Levine, Paul & Price, Stephen Wheatley, 1996. "Migration Theories and Evidence: An Assessment," Journal of Economic Surveys, Wiley Blackwell, vol. 10(2), pages 159-198, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Byron Gangnes, 2010. "The Employment Effects of Fiscal Policy: How Costly are ARRA Jobs?," Working Papers 2010-16, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    2. Nabi, Mahmoud Sami & Boughzala, Mongi, 2009. "Essai de chiffrage du coût social du chômage des jeunes diplômés en Tunisie [Social cost of young unemployed graduates in Tunisia]," MPRA Paper 84438, University Library of Munich, Germany.
    3. Tomáš Domonkos & Brian König, 2015. "Odhad nákladov nezamestnanosti v podmienkach slovenskej ekonomiky [Estimation of the Cost of Unemployment in Slovak Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(4), pages 498-516.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:bla:econom:v:68:y:2001:i:270:p:269-83 is not listed on IDEAS
    2. Brian Cushing & Jacques Poot, 2004. "Crossing boundaries and borders: Regional science advances in migration modelling," Advances in Spatial Science, in: Raymond J. G. M. Florax & David A. Plane (ed.), Fifty Years of Regional Science, pages 317-338, Springer.
    3. Hubert Jayet, 1996. "L'analyse économique des migrations, une synthèse critique," Revue Économique, Programme National Persée, vol. 47(2), pages 193-226.
    4. Elhorst, J. Paul, 2000. "The Mystery Of Regional Unemployment Differentialsa Survey Of Theoretical And Empirical Explanations," ERSA conference papers ersa00p60, European Regional Science Association.
    5. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim & Yin, Ya Ping, 2010. "Inverted Haavelmo Effects in a General Equilibrium Analysis of the Impact of Implementing the Scottish Variable Rate of Income Tax," SIRE Discussion Papers 2010-47, Scottish Institute for Research in Economics (SIRE).
    6. Anil Rupasingha & Yongzheng Liu & Mark Partridge, 2015. "Rural Bound: Determinants of Metro to Non-Metro Migration in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(3), pages 680-700.
    7. Tobias Ketterer & Andrés Rodríguez-Pose, 2015. "Local quality of government and voting with one’s feet," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 501-532, December.
    8. Patrizio Lecca & Peter G. McGregor & J. Kim Swales & Ya Ping Yin, 2014. "Balanced Budget Multipliers For Small Open Regions Within A Federal System: Evidence From The Scottish Variable Rate Of Income Tax," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 402-421, June.
    9. Tobias Emonts-Holley & Alastair Greig & Patrizio Lecca & Katerina Lisenkova & Peter G McGregor & J Kim Swales, 2017. "The impact of enhanced regional fiscal autonomy: towards a scandinavian movel for Scotland," Working Papers 1707, University of Strathclyde Business School, Department of Economics.
    10. Benjamin Wirth, 2013. "Ranking German regions using interregional migration - What does internal migration tells us about regional well-being?," ERSA conference papers ersa13p1254, European Regional Science Association.
    11. Wouter Vermeulen & J. van Ommeren, 2006. "Compensation of regional unemployment in housing markets," CPB Discussion Paper 57, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Jordan Rappaport & Jeffrey D. Sachs, 2001. "The U.S. as a coastal nation," Research Working Paper RWP 01-11, Federal Reserve Bank of Kansas City.
    13. Andrés Rodríguez-Pose & Tobias D. Ketterer, 2012. "Do Local Amenities Affect The Appeal Of Regions In Europe For Migrants?," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 535-561, October.
    14. Andrés Rodríguez-Pose & Tobias Ketterer, 2015. "Do we follow the money? The drivers of migration across regions in the EU," REGION, European Regional Science Association, vol. 2, pages 27-45.
    15. Rappaport, Jordan, 2004. "Why are population flows so persistent?," Journal of Urban Economics, Elsevier, vol. 56(3), pages 554-580, November.
    16. Kari Hämäläinen & Petri Böckerman, 2004. "Regional Labor Market Dynamics, Housing, and Migration," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 543-568, August.
    17. Jerzy Michalek & Nana Zarnekow, 2012. "Application of the Rural Development Index to Analysis of Rural Regions in Poland and Slovakia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 105(1), pages 1-37, January.
    18. Jens Suedekum, 2005. "Increasing returns and spatial unemployment disparities," Papers in Regional Science, Wiley Blackwell, vol. 84(2), pages 159-181, June.
    19. Onder, Ali Sina & Schlunk, Herwig, 2015. "State Taxes, Tax Exemptions, and Elderly Migration," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(1).
    20. Ning Jia & Raven Molloy & Christopher Smith & Abigail Wozniak, 2023. "The Economics of Internal Migration: Advances and Policy Questions," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 144-180, March.

    More about this item

    Keywords

    Unemployment;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlrv:y:2000:i:mar:p:1-10:n:v.82no.2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott St. Louis (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.