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Disparities, persistence and dynamics of regional unemployment rates in Germany

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  • Kunz, Marcus

Abstract

"The paper shows that the distribution of regional unemployment rates in Germany exhibits strong persistent behaviour. Furthermore, panel unit root tests and autoregressive fixed effects models indicate that regional unemployment rates display conditional rather than unconditional convergence. Thus, highly persistent unemployment disparities can be regarded as region-specific unemployment rates due to different regional endowments, adjusting quite rapidly to their region-specific means and therefore towards a stable pattern of unemployment disparities, rather than towards the national unemployment rate. Additionally, an investigation of adjustment processes suggests that the degree of persistence in western German unemployment rates after aggregate shocks has decreased markedly since the 1960s. For more recent years (1989-2004), neither aggregate nor region-specific shocks exhibit persistent behaviour. Therefore, slowworking adjustment mechanisms in response to shocks are not responsible for the persistent unemployment differentials. A comparison of regions and districts shows that the two regional levels have quite similar adjustment paths. The estimated half-lives of both aggregate and regionspecific shocks are found to be very robust within a range of 1-3 years." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Kunz, Marcus, 2009. "Disparities, persistence and dynamics of regional unemployment rates in Germany," IAB-Discussion Paper 200908, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:200908
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    Keywords

    Bundesrepublik Deutschland ; Arbeitslosigkeitsentwicklung ; Konvergenz ; Persistenz ; regionale Disparität ; regionale Verteilung ; Arbeitslosenquote ; 1980-2004;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • 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)

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