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Persistent Regional Unemployment Differentials Revisited

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  • David Gray
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    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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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Regional Studies.

    Volume (Year): 38 (2004)
    Issue (Month): 2 ()
    Pages: 167-176

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    Handle: RePEc:taf:regstd:v:38:y:2004:i:2:p:167-176

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    Related research

    Keywords: Regional unemployment rate differentials; Bivariate cointegration; Multivariate cointegration; Unit root; Ecarts du taux de chomage regional; Co-integration a deux variables; Co-integration a plusieurs variables; Element racine; Regionale Unterschiede der Arbeitslosenrate; Zweifach variabler Zusammenschluss; Mehrfach variabler Zusammenschlusseinheiten; Wurzeleinheit; Diferenciales en el nivel de desempleo regional; Cointegracion bivariante; Cointegracion multivariante; Unidad raiz;

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    Cited by:
    1. Matteo Lanzafame, 2006. "The Nature of Regional Unemployment in Italy," Studies in Economics 0607, Department of Economics, University of Kent.
    2. Lee, Chien-Chiang & Chang, Chun-Ping, 2008. "Unemployment hysteresis in OECD countries: Centurial time series evidence with structural breaks," Economic Modelling, Elsevier, vol. 25(2), pages 312-325, March.
    3. 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.
    4. Christian Merkl & Dennis J. Snower, 2007. "Escaping the Unemployment Trap � The Case of East Germany," Kiel Working Papers 1309, Kiel Institute for the World Economy.
    5. Monastiriotis, Vassilis, 2006. "Macro-determinants of UK regional unemployment and the role of employment flexibility," MPRA Paper 44, University Library of Munich, Germany.
    6. Merkl, Christian & Snower, Dennis J., 2008. "Escaping the Unemployment Trap: The Case of East Germany," IZA Discussion Papers 3681, Institute for the Study of Labor (IZA).
    7. 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.
    8. Katrencik, David & Tyrowicz, Joanna & Wojcik, Piotr, 2008. "Unemployment Convergence in Transition," MPRA Paper 15386, University Library of Munich, Germany.
    9. Lee, Cheng-Feng, 2010. "Testing for unemployment hysteresis in nonlinear heterogeneous panels: International evidence," Economic Modelling, Elsevier, vol. 27(5), pages 1097-1102, September.
    10. David Gray, 2005. "An examination of regional interaction and super-regions in Britain: An error correction model approach," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 619-632.
    11. Andrew E. Burke & Michael A. Nolan & Felix R. FitzRoy, 2006. "Education and Regional Job Creation by the Self-Employed: The English North-South Divide," Papers on Entrepreneurship, Growth and Public Policy 2006-07, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.

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