A Model of Multiple Equilibria in Geographic Labor Mobility, Issues 2002-2031We develop a model of double matching in the labor market and the social environment in order to explain different migration patterns in response to local economic shocks. This approach explains the different behaviors of workers in different groups, regions, or countries in an endogenous way by showing the existence of multiple equilibria, rather than in an exogenous manner by introducing ex-ante regulations or unemployment benefits. This model can also explain why individuals from some communities form "sister" communities in some cases and not in others. |
Common terms and phrases
amount of migration assume behavior change region chooses to move costs of moving current period decide to move decision to migrate destination patterns differences across communities differences in migration discount factor economic incentives economists Eichengreen employed employment status endogenous equilibria in destination exogenous moving costs expected utility F&F effect family and friends find a job formed sister communities framework friends have previously future discounted expected gains from moving gains of staying Guadalupe immigrants integrated and unemployed integrated this period job upon arrival Las Animas lemmas Mines and Massey multiple equilibria network externalities optimal currency area P₁ P₂ policy of moving probability of becoming range P2 rent control social environment social factors social integration status specific location Spilimbergo and Ubeda Teq)Tu unemployed individual unemployed this period unemployed worker unemployment benefits unobservable characteristics utility functions wage worker can find worker moves worker who knows x(At x(Bt