This paper is about the impact of globalisation on (low-skilled) labour. We build a new economic geography model in which two types of labour (low and high-skilled) are distinguished and in which, due to wage rigidities, unemployment may arise. We also introduce two types of transportation costs...

In this paper we want to shed some light on the empirical relevance of the new economic geography. Using one of the central features of the core new economic geography models, namely that wages have the tendency to fall the further one moves away from centres of economic activity, we investigate...