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Regional unemployment and productivity in Europe

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Author Info

  • Roberto Basile
  • Luca De Benedictis

Abstract

We analyse the relationship between regional unemployment and labour productivity in Europe, basing our empirical analysis on the predictions of a Neary-type General Oligopolistic Equilibrium trade model with efficiency-wages. Using semiparametric and dynamic panel data estimators and controlling for other factors, we give evidence of a nonlinear relationship between productivity and regional unemployment in Europe: with a level of productivity smaller than a certain threshold, this relationship is negative, while no relation occurs in the case of higher productivity regions. This evidence proves an important role of a wage-floor (induced by efficiency wages and exacerbated by institutional factors) under which the productivity gap cannot be compensated by a wage gap. Copyright (c) 2007 the author(s). Journal compilation (c) 2007 RSAI.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1435-5957.2007.00152.x
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Bibliographic Info

Article provided by Wiley Blackwell in its journal Papers in Regional Science.

Volume (Year): 87 (2008)
Issue (Month): 2 (06)
Pages: 173-192

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Handle: RePEc:bla:presci:v:87:y:2008:i:2:p:173-192

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190

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Cited by:
  1. Patuelli, Roberto & Schanne, Norbert & Griffith, Daniel A. & Nijkamp, Peter, 2011. "Persistence of regional unemployment : Application of a spatial filtering approach to local labour markets in Germany," IAB Discussion Paper 201103, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Enrico Marelli & Roberto Patuelli & Marcello Signorelli, 2012. "Regional unemployment in the EU before and after the global crisis," Post-Communist Economies, Taylor & Francis Journals, vol. 24(2), pages 155-175, January.
  3. Vesna Stavrevska, 2011. "The efficiency wages perspective to wage rigidity in the open economy: a survey," International Journal of Manpower, Emerald Group Publishing, vol. 32(3), pages 273-299, July.
  4. Colacicco, Rudy, 2012. "Strategic Trade Policy in General Oligopolistic Equilibrium," MPRA Paper 38118, University Library of Munich, Germany.
  5. Roberto Bande Ramudo & Melchor Fernández Fernández & Víctor Montuenga Gómez, 2011. "Wage flexibility and local labour markets: homogeneity of the wage curve in Spain," Documentos de trabajo - Analise Economica 0044, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
  6. Patuelli, R. & Schanne, N. & Griffith, D.A. & Nijkamp, P., 2010. "Persistent disparities in regional unemployment: Application of a spatial filtering approach to local labour markets in Germany," Serie Research Memoranda 0001, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  7. Colacicco, Rudy, 2012. "The "Average" Within-Sector Firm Heterogeneity in General Oligopolistic Equilibrium," MPRA Paper 40212, University Library of Munich, Germany.

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