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Migration, Frictional Unemployment, and Welfare Improving Labor Policies
Sato, Yasuhiro
open access
The definitive version is available at www.blackwell-synergy.com
Studies have suggested that there exists job search and recruiting friction in urban areas. This paper constructs a two-sector (rural and urban) model involving this factor and investigates how it affects migration and what the optimal policies should be. An analysis shows that frictional urban unemployment brings about inter-sector wage differentials and that an economy almost always has distortion in the absence of government intervention. Tax and subsidy policies that remove the distortion are explored. Setting urban wages appropriately is also shown to attain the optimum. Finally, we explore the criterion to judge whether changing uaban wages as a policy such as the minimum wage law enhances social welfare.
Blackwell
2004-11
eng
journal article
VoR
http://hdl.handle.net/2237/7159
https://nagoya.repo.nii.ac.jp/records/5553
https://doi.org/10.1111/j.0022-4146.2004.00357.x
0022-4146
Journal of Regional Science
44
4
773
793
https://nagoya.repo.nii.ac.jp/record/5553/files/ysatoJRS04.pdf
application/pdf
214.1 kB
2018-02-19