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Employment Status, Endogenous Regional Mobility, and Spatial Dependencies in Labor Markets

Author

Listed:
  • Fahr, René

    (University of Paderborn)

  • Sunde, Uwe

    (University of Munich)

Abstract

This paper investigates spatial correlation in the matching process of vacant jobs and job seekers. The importance of the interactions of regional labor markets in West Germany is highlighted in several dimensions. We test for spatial autocorrelation in regional hires, unemployment and vacancy levels, we examine the patterns of new matches in regions, identify clusters of regions of particularly intense interregional matching, and examine the effects of German re-unification. After setting-out a simple model of endogenous regional mobility and endogenous on-the-job search, we analyze the composition of new hires with respect to regional origin and previous employment status, the determinants of this composition, and the interaction of these characteristics. The results shed new light on the puzzle raised in the literature, which finds a large variation in unemployment rates, combined with little inter-regional migration. We find evidence in favour of labor market determined migration and against the ’internal migration puzzle’ found for other European countries and partly for the United States.

Suggested Citation

  • Fahr, René & Sunde, Uwe, 2002. "Employment Status, Endogenous Regional Mobility, and Spatial Dependencies in Labor Markets," IZA Discussion Papers 521, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp521
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    References listed on IDEAS

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    9. Faini, Riccardo & Galli, Giampaolo & Gennari, Pietro & Rossi, Fulvio, 1997. "An empirical puzzle: Falling migration and growing unemployment differentials among Italian regions," European Economic Review, Elsevier, vol. 41(3-5), pages 571-579, April.
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    12. Antolin, Pablo & Bover, Olympia, 1997. "Regional Migration in Spain: The Effect of Personal Characteristics and of Unemployment, Wage and House Price Differentials Using Pooled Cross-Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 215-235, May.
    13. Sunde, Uwe, 2002. "Unobserved Bilateral Search on the Labor Market: A Theory-Based Correction for a Common Flaw in Empirical Matching Studies," IZA Discussion Papers 520, Institute of Labor Economics (IZA).
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    Cited by:

    1. Rene Fahr & Uwe Sunde, 2006. "Regional dependencies in job creation: an efficiency analysis for Western Germany," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1193-1206.
    2. Fahr, Rene & Sunde, Uwe, 2006. "Spatial mobility and competition for jobs: Some theory and evidence for Western Germany," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 803-825, November.

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    More about this item

    Keywords

    job competition; internal migration; on-the-job search; composition of hires; unemployment;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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