The Impact of Labor Markets on Emergence and Persistence of Regional Asymmetries
32 Pages Posted: 11 Apr 2001
Date Written: January 2001
Abstract
This paper investigates the impact of labor markets and economies of agglomeration on firms location. We show that the existence of a lower bound on wage (e.g., a minimum wage or a reservation wage) introduces asymmetric location of firms. Moreover, changes in that lower bound or in global product demand may induce irreversible changes in location equilibria. Asymmetries in firms location may thus emerge and persist.
Keywords: Firms location, persistence, wages
JEL Classification: J23, R30
Suggested Citation: Suggested Citation
Toulemonde, Eric and Picard, Pierre M., The Impact of Labor Markets on Emergence and Persistence of Regional Asymmetries (January 2001). Available at SSRN: https://ssrn.com/abstract=265625 or http://dx.doi.org/10.2139/ssrn.265625
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