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ON THE IMPACT OF LABOR MARKET MATCHING ON REGIONAL DISPARITIES *
Author(s) -
Tharakan Joe,
Tropeano JeanPhilippe
Publication year - 2009
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.2008.00600.x
Subject(s) - matching (statistics) , economies of agglomeration , imperfect , incentive , labor mobility , outcome (game theory) , economics , economic geography , labour economics , market size , human capital , capital (architecture) , business , microeconomics , market economy , geography , international economics , statistics , mathematics , linguistics , philosophy , archaeology
We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics of workers' and firms' location choices, we show that the spatial outcome depends crucially on different dimensions of agents' mobility. The effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile or more specialized on the labor market.