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Persistence of regional unemployment : Application of a spatial filtering approach to local labour markets in Germany

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  • Patuelli, Roberto
  • Schanne, Norbert

    ()
    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Griffith, Daniel A.
  • Nijkamp, Peter

Abstract

"The geographical distribution and persistence of regional/local unemployment rates in heterogeneous economies (such as Germany) have been, in recent years, the subject of various theoretical and empirical studies. Several researchers have shown an interest in analysing the dynamic adjustment processes of unemployment and the average degree of dependence of the current unemployment rates or gross domestic product from the ones observed in the past. In this paper, we present a new econometric approach to the study of regional unemployment persistence, in order to account for spatial heterogeneity and/or spatial autocorrelation in both the levels and the dynamics of unemployment. First, we propose an econometric procedure suggesting the use of spatial filtering techniques as a substitute for fixed effects in a panel estimation framework. The spatial filter computed here is a proxy for spatially distributed region-specific information (e.g., the endowment of natural resources, or the size of the 'home market') that is usually incorporated in the fixed effects parameters. The same argument applies for the spatial filter modelling of the heterogenous dynamics. The advantages of our proposed procedure are that the spatial filter, by incorporating region-specific information that generates spatial autocorrelation, frees up degrees of freedom, simultaneously corrects for time-stable spatial autocorrelation in the residuals, and provides insights about the spatial patterns in regional adjustment processes. We present several experiments in order to investigate the spatial pattern of the heterogeneous autoregressive parameters estimated for unemployment data for German NUTS-3 regions. We find widely heterogeneous but generally high persistence in regional unemployment rates." (Author's abstract, IAB-Doku) ((en))

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Bibliographic Info

Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201103.

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Length: 37 pages
Date of creation: 10 Feb 2011
Date of revision:
Publication status: published in: Journal of Regional Science, Vol. 52, No. 2 (2012), p. 300-323
Handle: RePEc:iab:iabdpa:201103

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Keywords: Arbeitslosenquote; Persistenz; Schätzung; regionale Disparität;

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References

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Citations

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Cited by:
  1. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011 (Evaluation of active labor market programs : a summary of recent results for the German program refo," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 45(1), pages 41-62.
  2. E. Marelli & R. Patuelli & M. Signorelli, 2011. "Regional Unemployment in the EU before and after the Global Crisis," Working Papers wp791, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Matías Mayor & Roberto Patuelli, 2012. "Short-Run Regional Forecasts: Spatial Models through Varying Cross-Sectional and Temporal Dimensions," Working Paper Series 15_12, The Rimini Centre for Economic Analysis, revised Oct 2012.
  4. Gregory, Terry & Patuelli, Roberto, 2013. "Regional age structure, human capital and innovation: Is demographic ageing increasing regional disparities?," ZEW Discussion Papers 13-057, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Giuseppe Ricciardo Lamonica & Barbara Zagaglia, 2013. "The determinants of internal mobility in Italy, 1995-2006," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 29(16), pages 407-440, September.
  6. Garloff, Alfred & Pohl, Carsten & Schanne, Norbert, 2011. "Do small labor market entry cohorts reduce unemployment?," IAB Discussion Paper 201118, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. Timo Mitze & Falk Strotebeck, 2012. "What Drives Regional Cooperative Behavior in German Biotechnology? Embedding Social Network Analysis in a Regression Framework," ERSA conference papers ersa12p629, European Regional Science Association.
  8. Wrede, Matthias, 2011. "Unemployment, commuting, and search intensity," IWQW Discussion Paper Series 12/2011, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  9. Osiander, Christopher & Steinke, Joß, 2011. "Street-level bureaucrats in der Arbeitsverwaltung : Dienstleistungsprozesse und reformierte Arbeitsvermittlung aus Sicht der Vermittler," IAB Discussion Paper 201115, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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