This paper models regional labour market adjustments to macro-economic and policy shocks
through participation, employment and migration decisions of workers in the regional CGE
model Rhomolo. Being a multi-sectoral, inter-regional general equilibrium model, Rhomolo
is complex both in terms of its dimensionality and the modelling of spatial interactions
through trade flows and factor mobility. The modelling of the labour market is therefore
constrained by the requirement to keep the model tractable and computational solvable.
The labour market setup consists of individual labour participation decisions, including
the extensive margin (to participate or not) and the intensive margin (hours of work). A
wage-curve determining unemployment is parameterised and econometrically estimated on
the country level. Inter-regional labour migration is modelled in a discrete-choice framework,
with backward-looking expectations
PERSYN Damiaan Hedwig Leo;
TORFS Wouter;
KANCS D'Artis;
2015-01-02
Publications Office of the European Union
JRC89537
978-92-79-44520-0,
1831-9424,
EUR 26979,
OP LF-NA-26979-EN-N,
https://publications.jrc.ec.europa.eu/repository/handle/JRC89537,
10.2791/03481,
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