Regional labor markets are characterized by huge disparities of unemployment rates. Models of the New Economic Geography explain how disparities of regional goods markets endogenously arise but usually assume full employment. This paper discusses regional unemployment disparities by introducing...

Using data from the Brazilian Labor Monthly Survey (PME/ IBGE) for the years of 2006 and 2007, the paper investigates if the wage differential by firm size in Brazil can be explained by the predictions of the Efficiency Wage Theory. It is adopted a Switching Regression Model to estimate if large...