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Compensation of Regional Unemployment in Housing Markets
Author(s) -
VERMEULEN WOUTER,
VAN OMMEREN JOS
Publication year - 2009
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.1468-0335.2007.00664.x
Subject(s) - unemployment , economics , compensation (psychology) , labour economics , wage , demographic economics , macroeconomics , psychology , psychoanalysis
Why are regional unemployment differentials in Europe so persistent if, as the wage curve literature demonstrates, there is no compensation through wages? Using Urban Audit data for 142 cities over 12 EU countries, as well as a Dutch household survey, we estimate relationships between local labour market indicators and the average house price level. The evidence suggests that workers are compensated in housing markets to a significant extent, so that regional differences in unemployment may reflect an equilibrium outcome.