January 9, 2002

Factor mobility and regional disparities; east, west, home's best?

Unemployment rates as well as incomes per capita differ vastly across the regions of Europe. Labour mobility can play a role in resolving regional disparities.

This paper focuses on the questions why labour mobility is low in the EU and how it is possible that it remains low. We explore whether changes in labour participation act as an important alternative adjustment mechanism. We answer this question in the affirmative.

Furthermore, we argue that labour participation of young females is very important in adjusting to regional disparities. Finally, we examine whether part time work is an adjustment mechanism that is comparable to labour force participation. It turns out not to be.