the determinants of equilibrium unemployment in britain a lot of energy is currently being expended in trying to understand what has been happening to unemployment in britain and the rest of the developed world in this paper we look at this question in the british context by trying to confront some possible explanations with the data since the data we use are quarterly over rather a short period we are setting the explanations a very hard test most explanations tend to be rather casual and the theories underpinning them ill developed thus for example the so called real wage argument is based on the idea that real wages affect labour demand and that the equilibrium real wage bears some relatively stable relationship to output per head but how stable is not clear thus whether or not we can expect a well defined stable ceteris paribus dynamic relationship between real product wages as a proportion of output per head and unemployment is equally unclear so if such a relationship does not show up in a quarterly regression model this may not be that serious for the theory nevertheless we must look for the relationship for how else are we ever to discriminate between a plethora of conflicting views the primary emphasis in this paper is on the secular factors affecting unemployment rather than the cyclical variables consequently we shall not be concerned with developing a coherent theory of cyclical fluctuations and in the empirical work we shall control for the cycle simply by making use of those exogenous or predetermined variables which other work in this field suggests are important 2 the remainder of the paper is set out as follows the next section is concerned with specifying a model which generates a definition of equilibrium unemployment the outline of this model is a pair of equations determining the flows into and out of unemployment and these are specified in section ii which looks closely at the possible variables involved section iii then deals with the results and presents some general conclusions

local pay determination theoretical models of local pay are reviewed ranging from neoclassical perspectives unemployment wage trade off models and segmented labor market approaches the empirical work on u s north south differentials is discussed for the u k studies of the extent of and trends in geographical pay differentials are considered as well as behavioral explanations focusing on the role of excess demand the issue of adjustment processes is then discussed both in theory and in relation to empirical work for the u s and u k this discussion focuses largely on geographical spillover effects in terms of origins evidence and issues of identification finally the impact of certain impediments in the adjustment process are considered specifically in relation to the u k these concern the role and influence of national wage bargaining as well as factors inhibiting labor migration stemming from the housing market and the climate of the national labor market copyright 1992 by blackwell publishers ltd

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

white collar crime writ small a case study of bagels donuts and the honor system for more than a decade an mit trained economist has meticulously recorded the results of nearly 75 000 deliveries of bagels and donuts to corporate offices these bagels and donuts are left in workplaces in the morning along with a list of prices and a lockbox office workers purchase the products on the honor system later that day the uneaten goods and the lock box are collected and the relevant data for each office are recorded in a spreadsheet these data provide a unique opportunity for understanding the extent to which individuals behave honestly in this setting and the factors that influence the level of honesty an analysis of the discrepancy between the prices of the goods consumed and the actual payments deposited in the lock box yields a number of insights first the base payment rate is quite high on average payments represent almost 90 percent of the posted price in a model of pure self interest one would expect very low payment rates because there would seem to be many opportunities for individuals to take the products with almost no chance of their nonpayment being detected moderating the tendency to take the products without paying is the fact that low payment rates will increase the probability the delivery company stops serving the company paying for one s bagels and donuts viewed in this light is a public good for other office workers thus one might expect a strong negative relationship between office size and payment rates which is not present in the data rather the data appear more consistent with a model in which there are internal nonpecuniary costs associated with stealing the bagels and donuts i e people overwhelmingly pay for the products because it would be wrong not to do so the observed payment rates are systematically related to a variety of observable factors for instance payment rates fall in response to increases in the posted price this is consistent with the increase in financial costs pushing some marginal consumers to be willing to sustain the moral cost associated with not stealing the goods or paying less than full price payment rates are higher when many of the bagels and donuts go uneaten suggesting that the marginal consumer pays a lower share of the posted price than the inframarginal consumer purchasers of donuts appear to be more likely to pay less than the full price there is a sharp and persistent increase in the payment rate following the september 11 terrorist attacks

do council housing policies reduce migration between regions data from the 1973 general household survey of great britain are used to examine whether the council house system which currently provides a dwelling for one british family in every three tends to discourage long distance migration controls are introduced for various socioeconomic variables and the importance of occupation sector of employment age and education in explaining migration is discussed comparisons are also made between local movements and long distance migration the findings indicate that over longer distances council tenants have much lower migration rates than owner occupiers

unemployment and the inter regional mobility of labour the relationship between unemployment and interregional labor migration in the united kingdom is explored using data from the labour force survey for 1984 and 1977 the authors conclude that the experience of unemployment increases the likelihood of migration and that households in areas of high unemployment are more likely to move they also find that during periods of higher overall unemployment migration propensities are reduced annotation

group specific effects of interregional mobility on earnings a microdata analysis for germany lehmer f and moller j group specific effects of inter regional mobility on earnings a microdata analysis for germany regional studies the paper analyses the relationship between regional mobility and earnings for different groups of workers using a large panel microdata set the authors find negative earnings differentials of movers in the year before migration and strong evidence for significant wage gains through mobility a decomposition of blinder oaxaca type reveals different group specific rewards effects suggesting a positive post mobility wage differential of movers over the incumbent workforce for some groups irrespective of the region of destination the existence of a general wage growth effect of mobility appears to be robust and cannot be explained by the time invariant part of unobserved heterogeneity lehmer f et moller j l impact sur les revenus la mobilite interregionale des groupes specifiques des groupes sur les revenus une analyse des donnees microeconomiques pour l allemagne

sticky labor in spanish regions abstract migration among spanish regions has fallen significantly since the 1970s in spite of large and widening regional unemployment rate differentials in this paper i argue that this evolution is the result of a large increase in the national unemployment rate the reduction in regional dispersion in other economic variables due in part to important institutional changes since 1975 and the rise of migration from richer to poorer regions or affluent migration

search time unemployment and the migration decision unemployed people in distressed areas of the us have been reluctant to migrate to other areas in search of employment a negative correlation exists between weeks of job search and probability of migration and between local unemployment rates and out migration rates schwartzs model of migration behavior relates job search time to age and education widening the area searched reduces job search time job density is a function of worker age and education the feasibility of switching occupations declines with increasing age or education a worker with a given age and education can choose between greater search time and greater search area minimizing search time increases the likeliness of migration the study hypothesizes a negative relationship between length of job search and probability of migration and a positive relationship between length of job search and workers age and education data analyzed are from the us panel study of income dynamics which followed 6000 adults from 1968 80 for the unemployed data show that search time is an important migration determinant likeliness of migration decreases over time therefore areas with longterm unemployment will have lower rates of out migration

asymmetric volatility spillovers between uk regional worker flows and vacancies this paper investigates volatility spillovers between uk regional job finding job separation and vacancy rates employing a large bayesian logistic smooth transition vector autoregression var model we find high volatility spillovers between uk regional labour markets analyses of net spillovers show that in general shocks to job separation rates tend to spread into job finding and vacancy rates while vacancy rates are usually at the receiving end of shocks transmitted from the job separations and job findings to shed further light on the shock propagation mechanism we also look into more detailed matters such as the differences in spillovers between regions within the same regime and that of the same region but in different regimes

unemployment insurance design inducing moving and retraining evidence suggests that unemployed individuals can sometimes aect their job prospects by undertaking a costly action like deciding to move or retrain realistically such an opportunity only arises for some individuals and the iden tity of those may be unobservable ex ante the problem of characterizing con strained optimal unemployment insurance in this case has been neglected in previous literature we construct a model of optimal unemployment insurance where multiple incentive constraints are easily handled the model is used to analyze the case when an incentive constraint involving moving costs must be respected in addition to the standard constraint involving costly unobserv able job search in particular we derive closed form solutions showing that when the moving retraining incentive constraint binds unemployment bene ts should increase over the unemployment spell with an initial period with low bene ts and an increase after this period has expired

uk regional policy an evaluation introduct ion ities in unemployment during the recession of the early 1990s which bit deeply in the southern regions however the convergence of regional unemployment rates uk regional policy has existed at varying levels of intensity for nearly seven decades throughout its conceals persistent spatial disparities in unemployment at a higher level of disaggregation fig 2 shows that existence the overriding objective has been to provide economic help to the country s most heavily depressed those travel to work areas experiencing the highest unemployment rates in 1985 tend to be the same areas or least well ov areas a wide variety of policy measures have been used to create employment and thereby some 10 years later further table 1 shows that the spatial pattern of unemployment at county level has reduce unemployment in the areas with persistently high unemployment this paper has two primary aims remained remarkably stable broad regional aggregates conceal immense spatial disparities in unemployment rstly to identify the major bene ts of regional policy and secondly to investigate ways in which uk regional within regions and these spatial disparities are persistent over time it is this high unemployment persistence that policy can be made more evective and hence more eycient ultimately justi es spatially discriminating policies such as regional policy as a rst step it needs to be established that the uk actually has a regional problem it is easy to demonstrate the paper is organized as follows the next section identi es the major economic and social bene ts of that spatial disparities in unemployment at a broad level have virtually disappeared during the 1990s the regional policy followed by a review of recent government views on the case for regional policy the fourth north south divide that was so evident in the 1980s has been eroded by a substantial convergence in unsection compares two diverent approaches to solving regional problems the rst is a market based approach employment rates this is vividly illustrated in fig 1 which shows the dramatic narrowing of regional disparwhich aims to make local labour markets more exible

the migration decisions of young men in great britain an analysis of migration in the united kingdom of males aged 16 to 24 is presented using data from the 1979 european commission labour force survey the author constructs a disaggregate choice model that incorporates spatial aspects of migration decision making the results indicate that migration decisions of young men are significantly affected by family circumstances housing tenure educational attainment labor force status and occupation distinct differences are noted between migration patterns of economically active job changers other economically active young men and those out of work

residential mobility housing equity and the labour market henley a g 1998 residential mobility housing equity and the labour market economic journal 108 447 414 427

how different are the british in their willingness to move evidence from international social survey data drinkwater s and ingram p how different are the british in their willingness to move evidence from international social survey data regional studies this paper analyses people s willingness to move using data from the 1995 british social attitudes survey and international social survey programme the personal characteristics and sub regional indicators that are important in explaining the willingness to move within britain are identified it is also found that the willingness to move is only higher in a few other countries including the usa the equivalent desire to move is found to be much lower in eastern european countries and in several other european union member states compositional effects such as age and education are generally important in explaining differences in attitudes towards migration in comparison with other western economies however structural effects such as institutions history and culture tend to play a more dominant role in explaining differences compared with countries

residential and job mobility interregional variation and their interplay in us metropolitan areas while studies on residential and job mobility are typically conducted on a micro scale an examination of region wide mobility dynamics can also be meaningful as it can reflect the importance of s

spatial equilibrium with unemployment and wage bargaining theory and estimation abstract in this paper we present a spatial equilibrium model where search frictions hinder the immediate reallocation of workers both within and across local labor markets because of the frictions firms and workers find themselves in bilateral monopoly positions when determining wages although workers are not at each instant perfectly mobile across cities in the baseline model we assume that workers flows are sufficient to equate expected utility across markets we use the model to explore the joint determination of wages unemployment house prices and city size or migration a key role of the model is to clarify conditions under which this type of spatial equilibrium setup can be estimated we then use u s data over the period 1970 2007 to explore the fit and quantitative properties of the model our main goal is to highlight forces that influence spatial equilibria at 10 year intervals

can migration decisions be affected by income policy interventions evidence from finland haapanen m and ritsila j 2007 can migration decisions be affected by income policy interventions evidence from finland regional studies 41 339 348 using finnish micro level data this paper maps out whether migration decisions can be affected by income policy interventions the analysis focuses on individuals living in peripheral regions and distinguishes peripheral migration from growth centre migration in support of the human capital hypothesis the estimation results imply that migration decisions can be affected by income policy interventions for example an intervention that would increase an individual s expected disposable income by 10 given that he she does not move to a growth centre region would decrease his her probability of growth centre migration by approximately 12 however the impact appears to be modest compared for example with the impact of education on migration haapanen m et ritsila j 2007 la decision de migrer est elle influee par des politiques des revenus pon

the economic aftermath of resource booms evidence from boomtowns in the american west the current us oil and gas boom is injecting labour capital and revenue into communities near reserves will these communities be cursed with lower long run incomes in the wake of the boom we study the oil boom and bust cycle of the 1970s and 1980s to gain insights using annual data on drilling to identify western boom and bust counties we find substantial positive local employment and income effects during the boom in the aftermath of the bust however we find that incomes per capita decreased and unemployment compensation payments increased relative to what they would have been if the boom had not occurred

an empirical puzzle falling migration and growing unemployment differentials among italian regions abstract we investigate the causes behind the low and falling mobility levels in southern italy we argue that a combination of demographic factors high mobility costs and inefficiencies in the job matching process may account for the fall in interregional migration