Effects of infrastructure investments on the labour market
Overview
Background & policy context:
The situation of the labour market varies in different parts of Sweden. The differences most probably depend on regional trade conditions but there are also reasons to believe that the differences depict how regional labour markets function in the long-term.
From a political point of view, as well as for efficiency reasons, these regional differences ought to be decreased. In connection to this, society's support of infrastructure in the different regions is often mentioned. Among other things this can be noticed in the national transport goal concerning regional development.
Objectives:
The aim of the project was to try to measure effects of infrastructure investments to labour market.
Methodology:
Two empirical models have been used for measuring effects throughout econometric methods. The first model started in search models for individual behaviour on the labour market, assuming a dynamic view of the individual as a person in search for new and "better" jobs.
The second empiric model was based on theoretical models from the so called "new economic geography" that explains geographical accumulations of economic activities as an interplay between transport costs, increasing scale-yield in production and migration of labour within different regions. In other words, how accessibility to surrounding regions' spending-power might explain regional variations in income as well as in employment.
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