Competitive Search with Moving Costs

Author Name KAWATA Keisuke (Hiroshima University) / NAKAJIMA Kentaro (Tohoku University) / SATO Yasuhiro (Osaka University)
Creation Date/NO. August 2014 14-E-052
Research Project Spatial Economic Analysis on Regional Growth
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We developed a competitive search model involving multiple regions, geographically mobile workers, and moving costs. Equilibrium mobility patterns were analyzed and characterized, and the results indicate that shocks to a particular region, such as a productivity shock, can propagate to other regions through workers' mobility. Moreover, equilibrium mobility patterns are not efficient because of the existence of moving costs, implying that they affect social welfare because not only are they costs but also they distort equilibrium allocation. By calibrating our framework to Japanese regional data, we demonstrate the extent to which changes in moving costs affect unemployment and social welfare.

Published: Kawata, Keisuke, Kentaro Nakajima, and Yasuhiro Sato, 2016. "Multi-region job search with moving costs," Regional Science and Urban Economics, Vol. 61, pp. 114-129