Mobility of workers and population between old and new capital cities using the interregional economic model

Abstract

The purpose of this paper is to analyze the effects of transportation and mobility costs on the mobility of workers and the overall population between old and new capital cities. First of all, mobility costs clearly have a negative effect on utility; higher commuting costs could lead to the spatial dispersion of workers. In addition, if the monthly commuting cost exceeds 1290 USD between Seoul (the old capital) and Sejong (the new capital), it would be efficient for workers in Seoul to move to Sejong. Finally, the interregional population equilibrium could be achieved when the share of transportation cost to commodity price reaches 60.1%.