Convergence in West German Regional Unemployment Rates
AbstractDifferences in regional unemployment rates are often used to describe regional economic inequality. This paper asks whether changes in regional unemployment differences in West Germany are persistent over time. Understanding the persistency of regional unemployment differences helps us to assess how effective regional policy can be. While univariate tests suggest that changes in regional unemployment differences are persistent in West Germany, more powerful panel tests lend some support to the hypothesis that regional unemployment rates converge. However, these tests reveal a moderate speed of convergence at best. Because there is a structural break following the second oil crisis, we also use tests that allow for such a break. This provides evidence for both convergence and quick adjustment to an equilibrium distribution of regional unemployment rates that is, however, subject to a structural break. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd. 2007.
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Bibliographic InfoArticle provided by Verein für Socialpolitik in its journal German Economic Review.
Volume (Year): 8 (2007)
Issue (Month): (November)
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Other versions of this item:
- Christian Bayer & Falko Juessen, 2004. "Convergence in West German Regional Unemployment Rates," Urban/Regional 0411007, EconWPA.
- Falko Juessen & Christian Bayer, 2005. "Convergence in West German Regional Unemployment Rates," ERSA conference papers ersa05p410, European Regional Science Association.
- Bayer, Christian & Juessen, Falko, 2006. "Convergence in West German Regional Unemployment Rates," Technical Reports 2006,39, Technische Universität Dortmund, Sonderforschungsbereich 475: Komplexitätsreduktion in multivariaten Datenstrukturen.
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
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