Labor Mobility in the Light of New Economic Geography: The Case of European Union

15072

One of the fundamental assumptions of New Economic Geography Approach which brought up spatial effects in economic theories and emphised the role of geography in international trade is labor mobility within and between countries. Labor mobility determines the structure of production, the direction and the level of economic development by affecting the local population, the participation rate of labor force and the labor quality. In New Economic Geography Theory labors’ location choices is determined by wage differences. But wages by itself is not enough to attract labor to the country. Aside from high wages, the socio-cultural structure of the country has an important role especially in choosing between locations where wages are close to each other. Therefore, the purpose of this paper is to analyze the factors that affect the location choices of the labor force. This paper is to investigate the labor mobility among EU15 with panel data analysis by using OLS and GMM methodology. Thus, this paper tries to explain why/how mobile labor force prefer one country to another.

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New Economic Geography , Labor Mobility

Ege Strategic Research Journal

62

Ege Strategic Research Journal