Anna Piil Damm
() and Michael Rosholm
Anna Piil Damm: Department of Economics, Aarhus School of Business, Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Michael Rosholm: Department of Economics, University of Aarhus, Postal: Department of Economics, University of Aarhus, Building 326, 8000 Aarhus C, Denmark
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.
38 pages, September 2, 2005
Note: 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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