The Mortensen-Pissarides model with unemployment benefits and taxes has been able to account for the variation in … unemployment rates across countries but does not explain why geographical mobility is very low in some countries (on average, three … times lower in Europe than in the U.S.). We build a model in which both unemployment and mobility rates are endogenous. Our …

European labor markets are characterized by the low geographical mobility of workers. The absence of mobility is a … factor behind high unemployment when jobless people prefer to remain in their home region rather than to go prospecting in …, which appears to be a strong factor of immobility. It is also a fairly large factor of unemployment when social capital is …