Template-Type: ReDIF-Paper 1.0

Author-Name: Stephan Russek
Author-X-Name-First: Stephan
Author-X-Name-Last: Russek

Title: 	When skilled and unskilled labor are mobile: a new economic geography approach
	
Abstract: This paper develops an analytically solvable new economic geography model of the
‘footloose entrepreneur’ class in which not only skilled labor is mobile, but also unskilled
labor. Allowing unskilled labor to move freely between different regions increases the agglomeration
incentive of skilled labor. Depending on the level of unskilled labor mobility,
the geographical distribution of economic activity is either a ‘pitchfork’ or a ‘tomahawk’.
If unskilled labor is very mobile, complete agglomeration is the only stable outcome. When
trade costs are high, skilled and unskilled labor migration reinforce each other leading to
agglomeration of both types of labor in the same region. For lower levels of trade cost,
unskilled labor returns to its region of origin, whereas skilled labor remains concentrated.
Length:  33 pages
Creation-Date:  2008-04
File-URL: http://www.bgpe.de/texte/DP/051_russek.pdf
File-Format: Application/pdf
File-Function: First version, 2008
Number: 051
Classification-JEL: F12, F15, F22, R22
Keywords: agglomeration; migration; economic geography; bifurcation pattern
Handle: RePEc:bav:wpaper:051_russek