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Regional labor markets in Finland: Adjustment to total versus region-specific shocks

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Author Info
Sari Pekkala () (School of Business and Economics, University of Jyväskylä, P.O. Box 35, FIN-40351 Jyväskylä, Finland)
Aki Kangasharju () (Government Institute for Economic Research, Hämeentie 3, FIN-00531 Helsinki, Finland)

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Abstract

This article analyses regional labor market adjustment in the Finnish provinces during 1976-2000. We investigate the inter-relations of employment, unemployment, labor force participation, and migration to see how a change in region-specific and total labor demand is adjusted. The analysis reveals that region-specific labor demand shocks adjust mainly via participation, whereas total shocks are adjusted by unemployment. The region-specific component of labor demand shock has shorter-lived effects on unemployment and participation, but its effect on employment is permanent. Conversely, total shocks leave no permanent effect. Migration is more important in the region-specific case where, after a few years, it acquires a large role in the adjustment process.

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Publisher Info
Article provided by Springer in its journal Papers in Regional Science.

Volume (Year): 81 (2002)
Issue (Month): 3 ()
Pages: 329-342
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Handle: RePEc:spr:presci:v:81:y:2002:i:3:p:329-342

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Related research
Keywords: Labor market; employment; unemployment; migration; shock adjustment;

Find related papers by JEL classification:
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

Cited by:
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  1. Farhang Niroomand & Edward Nissan, 2007. "Socio-Economic Gaps within the EU: A Comparison," International Advances in Economic Research, Springer, vol. 13(3), pages 365-378, August. [Downloadable!] (restricted)
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