abstract: 'This paper analyses the efficacy of regional and federal government

  policies in reducing inter-regional unemployment disparities. We use as

  our framework a two-region general equilibrium model with a given

  freely-mobile supply of labour. We assume inter-regional migration to

  occur in response to inter-regional utility differentials. Each region

  has households, firms and a regional government. In addition to regional

  governments, there is a federal government. The firms in a region use a

  single factor, labour, to produce a single good which we assume to be

  different to that produced in the other region. It is supplied to

  households and to the regional government in the form of payroll taxes.

  Households consume some, trade some with households in the other region

  and give some up to the federal government as income tax. Firms and

  households bargain over wages and firms then choose employment to

  maximise profits. The resulting equilibrium will generally not be a

  full-employment one.

  We simulate a linearised numerical version of the model. We examine

  seven alternative policies, six carried out by a regional government and

  one by the federal government. In the first group there are traditional

  tax/expenditure polices as well as policies which might be seen as

  attacking the natural rate of unemployment: changes in unemployment

  benefits, changes in union power, changes in the labour force and

  changes in labour productivity. The federal government policy is a

  regionally-differentiated fiscal policy.

  Contrary to expectations, many policies which have traditionally been

  recommended to alleviate unemployment are found, in fact, to exacerbate

  the unemployment problem.'
affiliation: 'Groenewold, N (Corresponding Author), Univ Western Australia, Econ Discipline,
  Crawley, WA, Australia.

  Groenewold, N., Univ Western Australia, Econ Discipline, Crawley, WA, Australia.

  Hagger, A. J., Univ Tasmania, Hobart, Tas 7001, Australia.'
author: Groenewold, N. and Hagger, A. J.
author-email: nic.groenewold@uwa.edu.au
author_list:
- family: Groenewold
  given: N.
- family: Hagger
  given: A. J.
da: '2023-09-28'
doi: 10.1111/j.1467-8454.2008.00354.x
eissn: 1467-8454
files: []
issn: 0004-900X
journal: AUSTRALIAN ECONOMIC PAPERS
keywords-plus: 'CYCLICAL SENSITIVITY; DIFFERENTIALS; MIGRATION; RATES; STATE;

  EQUALIZATION; ELASTICITIES; REGISTRATION; PERSISTENCE; EFFICIENCY'
language: English
month: DEC
number: '4'
number-of-cited-references: '42'
orcid-numbers: Groenewold, Nicolaas/0000-0003-3612-4470
papis_id: ea90129a682eae97415adb680c263138
ref: Groenewold2008regionalunemployment
times-cited: '0'
title: 'REGIONAL UNEMPLOYMENT DISPARITIES: AN EVALUATION OF POLICY MEASURES'
type: Article
unique-id: WOS:000261131300004
usage-count-last-180-days: '0'
usage-count-since-2013: '3'
volume: '47'
web-of-science-categories: Economics
year: '2008'