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Department of Business and Management Science, Norwegian School of Economics (NHH) Discussion Papers, Department of Business and Management Science, Norwegian School of Economics (NHH)

No 2008/17:
An agent-based computational approach to explaining persistent spatial unemployment disparities

David McArthur (), Inge Thorsen () and Jan Ubøe ()

Abstract: This paper explores possible reasons for persistent spatial unemployment disparities using agent-based computational methods. The method relies on observing the actions of thousands of individuals within an artificial society. The paper models the effect of unemployment insurance, wage disparities, region specific amenities and innate residential preferences on regional labour market interactions, accounting for both migration and commuting. An empirical example of Rogaland county in south-west Norway is given, where unemployment disparities have proved remarkably persistent for decades. The model provides non-trivial insight into the nature of spatial unemployment disparities as well as making a valuable contribution to the policy debate.

Keywords: Unemployment insurance; wage disparities; region specific amenities; innate residential preferences; regional labour market interactions; (follow links to similar papers)

JEL-Codes: R10; R12; R15; (follow links to similar papers)

30 pages, September 22, 2008

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