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 a...

Regional labor markets are characterized by huge disparities. The literature on the wage curve argues that there exists a negative relationship between unemployment and wages. However, this literature cannot explain how disparities of these variables between regions endogenously arise. In...

This paper studies a two-region model in which unemployment, education decisions and interregional migration are endogenous. The poorer region exhibits both lower wages and higher unemployment rates, and migrants to the richer region are disproportionally skilled. The brain drain from the poor...