Title: Modelling regional labour market dynamics: Participation, employment and migration decisions in a spatial CGE model for the EU
Publisher: Publications Office of the European Union
Publication Year: 2014
JRC N°: JRC89537
ISBN: 978-92-79-44520-0
ISSN: 1831-9424
Other Identifiers: EUR 26979
OP LF-NA-26979-EN-N
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC89537
DOI: 10.2791/03481
Type: EUR - Scientific and Technical Research Reports
Abstract: 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
JRC Directorate:Growth and Innovation

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