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Labour productivity and regional labour markets resilience in Europe

Author

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  • Elias Giannakis

    (The Cyprus Institute)

  • Theofanis P. Mamuneas

    (University of Cyprus)

Abstract

This paper conceptualizes and empirically explores the resilience of European Union regional labour markets in terms of labour productivity growth. We assess the effect of pre-crisis region-specific factors on regional labour markets resilience controlling for the effect of exogenous technological change and substitution between capital and labour. Regional input–output models are developed to estimate supplies and sales linkages across the European Union NUTS-2 regional economies. Spatial Durbin Error Model estimates suggest that regional labour markets characterised by a higher level of economic pull capabilities of the Construction sector and a higher level of industrial concentration can better withstand the effects of the negative shock and recover faster. Place-based policies building on regions’ competitive strengths can smooth out the negative effect of the economic shock and accelerate the recovery of regional labour markets, while policy interventions promoting capital investment can further enhance labour productivity in European Union regions.

Suggested Citation

  • Elias Giannakis & Theofanis P. Mamuneas, 2022. "Labour productivity and regional labour markets resilience in Europe," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 691-712, June.
    • Handle: RePEc:spr:anresc:v:68:y:2022:i:3:d:10.1007_s00168-021-01100-y
    DOI: 10.1007/s00168-021-01100-y
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    More about this item

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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