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

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

JEL-codes: J15; J64; J68

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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