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Regional Beveridge Curves: A Latent Variable Approach

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  • Robert Dixon
  • G. C. Lim
  • John Freebairn

Abstract

D ixon R., L im G. C. and F reebairn J. Regional Beveridge curves: a latent variable approach, Regional Studies . This paper applies an unobserved components model to a panel of Australian data to identify the direction and timing of the shifts in regional Beveridge curves. The approach identifies a common factor while allowing for region-specific effects. The common factor that drives the relationship between regional unemployment and vacancy rates is extracted and it is then related to various explanatory variables. The contribution of common shocks to fluctuations in regional unemployment ranges from 18% to 68%. The paper demonstrates the usefulness of a latent variable approach and, in relation to policy, the findings suggest the need for an explicit regional policy to tackle unemployment in Australia.

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File URL: http://hdl.handle.net/10.1080/00343404.2011.644238
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Bibliographic Info

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

Volume (Year): 48 (2014)
Issue (Month): 2 (February)
Pages: 254-269

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Handle: RePEc:taf:regstd:v:48:y:2014:i:2:p:254-269

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Cited by:
  1. José Ramón García Martínez & Valeri Sorolla, 2013. "Frictional and Non Frictional Unemployment in Models with Matching Frictions," Working Papers. Serie AD 2013-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Carlo Altavilla & Floro Ernesto Caroleo, 2013. "Asymmetric Effects of National-based Active Labour Market Policies," Regional Studies, Taylor & Francis Journals, vol. 47(9), pages 1482-1506, October.
  3. Dobrescu, Emilian, 2011. "Sectoral Structure and Economic Growth," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-36, September.
  4. Klinger, Sabine & Weber, Enzo, 2012. "Decomposing Beveridge curve dynamics by correlated unobserved components," IAB Discussion Paper 201228, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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