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Persistent Regional Unemployment Differentials Revisited

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  • David Gray

Abstract

Gray D. (2004) Persistent regional unemployment differentials revisited, Reg. Studies 38, 167-176. Based on bivariate and multivariate cointegration, three inferences concerning the nature of the British regional unemployment rates are drawn. First, regional unemployment rates are characterized by long-run, persistent relationships. The differentials are maintained by equilibrating systemic forces that induce co-movements of rates in the long-run, implying that decreasing the national rate of unemployment will reduce regional rates, but not eliminate differentials. Second, multivariate cointegration provides a richer picture of unemployment co-movements compared with bivariate analysis. Third, East Anglia does not revert to an equilibrium relationship with the other regions, suggesting that it is not constrained to follow the common trends driving the British regional system in the long-run.

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  • David Gray, 2004. "Persistent Regional Unemployment Differentials Revisited," Regional Studies, Taylor & Francis Journals, vol. 38(2), pages 167-176.
    • Handle: RePEc:taf:regstd:v:38:y:2004:i:2:p:167-176
    DOI: 10.1080/0034340042000190145
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    Cited by:

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    7. Girijasankar Mallik & Parikshit K. Basu & John Hicks & Richard Sappey, 2014. "Do the Determinants of Employability and Earnings Returns Produce Similar Outcomes in Metropolitan and Regional Labour Markets? The Case of New South Wales, Australia," Regional Studies, Taylor & Francis Journals, vol. 48(10), pages 1706-1718, October.
    8. Lee, Cheng-Feng, 2010. "Testing for unemployment hysteresis in nonlinear heterogeneous panels: International evidence," Economic Modelling, Elsevier, vol. 27(5), pages 1097-1102, September.
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    10. Joanna Tyrowicz & Piotr Wójcik, 2010. "Unemployment Convergence in Transition," Studies in Economic Transition, in: Enrico Marelli & Marcello Signorelli (ed.), Economic Growth and Structural Features of Transition, chapter 11, pages 236-259, Palgrave Macmillan.
    11. Khraief, Naceur & Shahbaz, Muhammad & Heshmati, Almas & Azam, Muhammad, 2020. "Are unemployment rates in OECD countries stationary? Evidence from univariate and panel unit root tests," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    12. Stilianos Alexiadis & Konstantinos Eleftheriou & Peter Nijkamp, 2013. "Do Income Disparities dissipate across the US States? Experimenting with a Vector Error Correction Model," Tinbergen Institute Discussion Papers 13-165/VIII, Tinbergen Institute.
    13. Monastiriotis, Vassilis, 2006. "Macro-determinants of UK regional unemployment and the role of employment flexibility," MPRA Paper 44, University Library of Munich, Germany.
    14. Werner, Daniel, 2013. "Regional convergence analysis for skill-specific employment groups," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79706, Verein für Socialpolitik / German Economic Association.
    15. Alexiadis, Stilianos & Eleftheriou, Konstantinos, 2010. "The Morphology of Income Convergence in US States: New Evidence using an Error-Correction-Model," MPRA Paper 20096, University Library of Munich, Germany.
    16. Werner, Daniel, 2013. "New insights into the development of regional unemployment disparities," IAB-Discussion Paper 201311, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    17. Lee, Cheng-Feng & Hu, Te-Chung & Li, Ping-Cheng & Tsong, Ching-Chuan, 2013. "Asymmetric behavior of unemployment rates: Evidence from the quantile covariate unit root test," Japan and the World Economy, Elsevier, vol. 28(C), pages 72-84.
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    19. Aviral Tiwari, 2014. "Unemployment hysteresis in Australia: evidence using nonlinear and stationarity tests with breaks," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(2), pages 681-695, March.

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