The regional distribution of unemployment. What do micro-data tell us?
AbstractRegional disparities in unemployment rates are large and persistent. The literature provides evidence of their magnitude and evolution, as well as evidence of the role of certain economic, demographic and environmental factors in explaining the gap between regions of low and high unemployment. Most of these studies, however, adopt an aggregate approach and so do not account for the individual characteristics of the unemployed and employed in each region. This paper, by drawing on micro-data from the Spanish wave of the Labour Force Survey, seeks to remedy this shortcoming by analysing regional differentials in unemployment rates. An appropriate decomposition of the regional gap in the average probability of being unemployed enables us to distinguish between the contribution of differences in the regional distribution of individual characteristics from that attributable to a different impact of these characteristics on the probability of unemployment. Our results suggest that the well-documented disparities in regional unemployment are not just the result of regional heterogeneity in the distribution of individual characteristics. Non-negligible differences in the probability of unemployment remain after controlling for this type of heterogeneity, as a result of differences across regions in the impact of the observed characteristics. Among the factors considered in our analysis, regional differences in the endowment and impact of an individual’s education are shown to play a major role.
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Bibliographic InfoPaper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 201125.
Length: 44 pages
Date of creation: Dec 2011
Date of revision: Dec 2011
Regional labour markets; Regional unemployment; Education; Gap decomposition for non-linear models. JEL classification:C25; J64; J70; R23;
Other versions of this item:
- Enrique López-Bazo & Elisabet Motellón, 2013. "The regional distribution of unemployment: What do micro-data tell us?," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 383-405, 06.
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-19 (All new papers)
- NEP-EDU-2011-12-19 (Education)
- NEP-GEO-2011-12-19 (Economic Geography)
- NEP-LAB-2011-12-19 (Labour Economics)
- NEP-URE-2011-12-19 (Urban & Real Estate Economics)
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- Sala, Hector & Trivín, Pedro, 2013. "Labour Market Dynamics in Spanish Regions: Evaluating Asymmetries in Troublesome Times," IZA Discussion Papers 7746, Institute for the Study of Labor (IZA).
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