To examine the effects of heterogeneous labor mobility on the distribution of industries and analyze the subsidy policy for attracting firms, this paper develops an analytically solvable new economic geography model, which incorporates heterogeneous locational preferences and an intra-industry...

To answer whether capital mobility exacerbates or dampens the agglomerative tendency of footloose entrepreneurs, this paper incorporates a footloose-capital with a footloose-entrepreneur manufacturing industry based on a tractable analytical structure with two identical regions. The model shows...

Within an efficiency wage framework, we study the effects of two revenue-neutral tax reforms that change the progressivity of the labour tax system. A revenue-neutral increase in both the wage tax and tax exemption and a revenue-neutral change in the composition of labour taxation towards the...

We analyze empirically the impact of urban agglomeration on Italian wages. Using micro-data from the Bank of Italy'sSurvey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employeesdistributed in 242 randomly drawn local labor markets (30 percent of the...

In this paper, we analyse the implications of labour market integration in a two-region model with local human capital externalities and congestion effects. We show that integration can be a double-edged sword. Integration and the ensuing agglomeration of skilled labour can reduce "real" income...

We examine the role of social relationships in facilitating knowledge flows by estimating the flow premium captured by a mobile inventor's previous location. Once an inventor has moved, they are gone - but are they forgotten? We find that knowledge flows to an inventor's prior location are...

This paper presents a simple, analytically solvable Chamberlinian agglomeration model. As in the canonical core-periphery (CP) model, two agglomerative forces are at work. However, the present model exhibits a 'pitchfork bifurcation' rather than the 'tomahawk bifurcation' of the CP model.

The paper analyzes the impact of skill-biased migration policies under the economics of agglomeration. It therefore develops an agglomeration model with two types of mobile worker who are heterogeneous and differ both within and between skill groups with respect to their migration propensity. On...

The division of labor between and within countries is driven by two fundamental forces, comparative advantage and increasing returns. We set up a simple Ricardian model with a Marshallian input sharing mechanism to study their interplay. The key insight that emerges is that the interaction...