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Persistent Disparities in Regional Unemployment: Application of a Spatial Filtering Approach to Local Labour Markets in Germany

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Author Info

  • Roberto Patuelli

    ()
    (Institute for Economic Research (IRE), University of Lugano, Switzerland; The Rimini Centre for Economic Analysis, Italy)

  • Norbert Schanne

    ()
    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Daniel A. Griffith

    ()
    (School of Economic, Political and Policy Sciences, University of Texas at Dallas, USA)

  • Peter Nijkamp

    ()
    (Department of Spatial Economics, VU University Amsterdam, The Netherlands)

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 coefficients. 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. In the paper we present several experiments in order to investigate the spatial pattern of the heterogeneous autoregressive coefficients estimated for unemployment data for German NUTS-3 regions.

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Bibliographic Info

Paper provided by USI Università della Svizzera italiana in its series Quaderni della facoltà di Scienze economiche dell'Università di Lugano with number 1001.

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Length: 28 pages
Date of creation: Jan 2010
Date of revision:
Handle: RePEc:lug:wpaper:1001

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Web page: https://www.bul.sbu.usi.ch

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Keywords: unemployment persistence; dynamic panel; hysteresis; spatial filtering; fixed effects;

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References

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Citations

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Cited by:
  1. Terry Gregory & Roberto Patuelli, 2013. "Regional Age Structure, Human Capital and Innovation - Is Demographic Ageing Increasing Regional Disparities?," Working Paper Series 51_13, The Rimini Centre for Economic Analysis.
  2. 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).
  3. 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].
  4. 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].
  5. 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.
  6. 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.
  7. Enrico Marelli & Roberto Patuelli & Marcello Signorelli, 2012. "Regional unemployment in the EU before and after the global crisis," Post-Communist Economies, Taylor & Francis Journals, vol. 24(2), pages 155-175, January.
  8. 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.
  9. 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.

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