This paper analyses the efficacy of regional and federal government policies in reducing inter-regional unemployment disparities. We use as our framework a two-region general equilibrium model with a given freely-mobile supply of labour. We assume inter-regional migration to occur in response to...

The effects on the aggregate unemployment rate of employment-protection provisions has been the subject of considerable debate. This paper shows that if firms pay efficiency wages to encourage effort in the workplace, the effect of increasing employment security is to increase the efficiency...