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Department of Economics, Aarhus School of Business, University of Aarhus Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus

No 05-1:
Employment Effects of Dispersal Policies on Refugee Immigrants: Theory

Anna Piil Damm () and Michael Rosholm ()

Abstract: This paper formulates a partial search model in which unemployed

individuals simultaneously search for job and location of residence.

Most importantly, we show that, ceteris paribus, a decrease in current

place utility increases the transition rate into a new location of

residence and the transition rate into employment outside the local

labour market, but decreases the transition rate into local employment.

Thus, a decrease in current place utility decreases the overall

job-finding rate if the local reservation wage effect dominates.

We argue that dispersal policies on refugee immigrants are characterised

by low average values of current place utility. Hence, the

model predicts that dispersal policies increase the geographical mobility

rates of refugees and, for a sufficiently large local reservation wage

effect, decrease their job-finding rates.

Keywords: Job Search; Residential Search; Geographical Mobility; Dispersal Policy on Refugees; (follow links to similar papers)

JEL-Codes: J15; J64; J68; (follow links to similar papers)

38 pages, September 2, 2005

Published as “Employment Effects of Spatial Dispersal of Refugees”, with M. Rosholm. Review of Economics of the Household, 2010, 8(1): 105-146

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