ENTER Seminar -Oscar Vilargunter (TSE)

Abs​tract: Despite significant differences across local labor market outcomes within countries, most policies are set at the national level. This paper examines the reallocation of uniform minimum wages across heterogeneous local labor markets. To achieve this, I introduce a spatial general equilibrium model with migration dynamics and job market frictions. By adjusting the minimum wage, we alter workers’ incentives to migrate between local labor markets. This change could yield positive outcomes for two reasons: a potential reduction in the unemployment rate due to increased migration and the reallocation of workers towards higher-productivity labor markets. The model is estimated using matched employer-employee data from France. I employ the estimated model to determine the optimal minimum wage level, and to describe its effects on welfare, unemployment and migration rates.

Location: Room 321, Drayton House