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Modelling Migration and Regional Labour Markets: an Application of the New Economic Geography Model RHOMOLOL

Journal Contribution - Journal Article

The paper describes the dynamic spatial general equilibrium model, Regional Holistic MOdeL(RHOMOLO), developed by the European Commission, where the labour market equilibrium is determined by firms' labour demand, unemployment and interregional labour migration. We carry out simulations on the effects of transportation costs on regional labour markets. Our results confirm that wages and unemployment are by far the most important channels of labour market adjustment in the EU. In contrast, labour migration is found to play a secondary role. Also, the complexity and spatially inter-dependent relationship among market access, labour demand, and labour supply is found. It underlines the significance of dynamic spatial general equilibrium approach. © 2014-Center for Economic Integration, Sejong Institution, Sejong University, All Rights Reserved.
Journal: Journal of Economic Integration
ISSN: 1225-651X
Issue: 2
Volume: 29
Pages: 372 - 407
Publication year:2014