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The partial derivatives with respect to
have the indicated sign if
i.e.
 |
(20) |
The budget constraint of the UI (9) or (14) can be transformed into
or
Insertion of the right-hand side of the equation in place of the left-hand side of inequality (20), and multiplication with the denominators of the fractions yields
Multiplication with
then gives
The left-hand side is the rate of employment in region 1, the right-hand side is the rate of
employment in region 2. For the derivative with respect to
, a parallel consideration applies.
Helge Sanner: Regional Unemployment Insurance, Potsdam 2001