Vermeulen, W. and van Ommeren, J.N. (2008). Compensation of regional unemployment in housing markets Economica, 76(301):71--88.
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Affiliated author
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Publication year2008
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JournalEconomica
Why are regional unemployment differentials in Europe so persistent if, as the wage curve literature demonstrates, there is no compensation through wages? Using Urban Audit data for 142 cities over 12 EU countries, as well as a Dutch household survey, we estimate relationships between local labour market indicators and the average house price level. The evidence suggests that workers are compensated in housing markets to a significant extent, so that regional differences in unemployment may reflect an equilibrium outcome. {\textcopyright} 2009 The London School of Economics and Political Science.