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Sources for regional unemployment disparities in Germany : lagged adjustment processes, exogenous shocks or both?

Author

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  • Kunz, Marcus

    (Universität Regensburg)

Abstract

"The paper analyses movements in the unemployment rate of West German districts in the period 1992-2004 by the chain reaction theory of unemployment (CRT). The estimations show that unemployment movements are generated together by lagged adjustment processes and by exogenous shocks. We find that adjustment processes to labour demand shocks are transient and do not display hysteresis effects. The effect of a labour demand shock to the unemployment rate disappears completely within only 2 years. Approximately half of the shock affects the unemployment rate in the contemporaneous period, the other half is due to temporal persistence in future periods, i.e. lagged adjustment effects. These results hold for low, middle and high unemployment regions and are in line with other studies in this field. The effects of exogenous national variables are much higher than those of exogenous regional variables during both, boom as well as recession years. The differentiation between low, middle and high unemployment regions shows that the development of regional factors would generate a regional convergence process, while national factors tend to impede this development." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Kunz, Marcus, 2009. "Sources for regional unemployment disparities in Germany : lagged adjustment processes, exogenous shocks or both?," IAB-Discussion Paper 200919, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:200919
    as

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    File URL: https://doku.iab.de/discussionpapers/2009/dp1909.pdf
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    Citations

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    Cited by:

    1. Roberto Bande & Marika Karanassou, 2014. "Spanish Regional Unemployment Revisited: The Role of Capital Accumulation," Regional Studies, Taylor & Francis Journals, vol. 48(11), pages 1863-1883, November.
    2. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2023. "Natural and cyclical unemployment: A stochastic frontier decomposition and economic policy implications," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 5-39, January.

    More about this item

    Keywords

    Bundesrepublik Deutschland ; Westdeutschland ; Determinanten ; Hysterese ; Arbeitslosigkeitsentwicklung ; Landkreis ; Persistenz ; regionale Disparität ; Arbeitslosenquote ; 1992-2004;
    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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