IDEAS home Printed from https://ideas.repec.org/p/mib/wpaper/16.html
   My bibliography  Save this paper

Regional Adjustment to Employment Shocks: Italy 1960-1994

Author

Listed:
  • Marco Leonardi

    (Centre of Economic Performance, LSE London)

Abstract

In this paper I study the dynamic response of regional variables to employment shocks in Italy 1960-94. Considering an univariate model I find low persistence of the regional unemployment rate in deviation from the national mean. This confirms previous results (Eichengreen 1992) and suggests that some other mechanisms besides migration are at work to restore regional labour market equilibrium in Italy. Using multivariate VAR analisys we obtain that movements in partecipation rather than in migration of workers explain the low persistence of regional relative unemployment in the average Italian region. Wage response to employment shocks has very mild effects on employment and migration dynamics. Adjustment dynamics are very different in the North and the South. The southern regions show a very persistent unemployment and very low interregional migration in response to employment shocks. The lack of interregional migration in the South could be an explanation of the growing gap in unemployment rates between North and South, at least for the part not due to changes in regional natural rates.

Suggested Citation

  • Marco Leonardi, 1997. "Regional Adjustment to Employment Shocks: Italy 1960-1994," Working Papers 16, University of Milano-Bicocca, Department of Economics, revised Sep 1998.
  • Handle: RePEc:mib:wpaper:16
    as

    Download full text from publisher

    File URL: http://repec.dems.unimib.it/repec/pdf/mibwpaper16.pdf
    File Function: First version, 1997
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bayoumi, Tamim & Eichengreen, Barry, 1992. "Shocking Aspects of Monetary Unification," Department of Economics, Working Paper Series qt791143kp, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    2. Paul Krugman, 1991. "History versus Expectations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 651-667.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Decressin, Jorg & Fatas, Antonio, 1995. "Regional labor market dynamics in Europe," European Economic Review, Elsevier, vol. 39(9), pages 1627-1655, December.
    5. Tamim Bayoumi & Barry Eichengreen, 1992. "Shocking Aspects of European Monetary Unification," NBER Working Papers 3949, National Bureau of Economic Research, Inc.
    6. Krugman, Paul & Venables, Anthony J., 1996. "Integration, specialization, and adjustment," European Economic Review, Elsevier, vol. 40(3-5), pages 959-967, April.
    7. Paul De Grauwe & Wim Vanhaverbeke, 2014. "Is Europe an Optimum Currency Area? Evidence from Regional Data," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 8, pages 231-252, World Scientific Publishing Co. Pte. Ltd..
    8. Damien Neven & Claudine Gouymte, 1995. "Regional Convergence in the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 33(1), pages 47-65, March.
    9. Helg, Rodolfo & Manasse, Paolo & Monacelli, Tommaso & Rovelli, Riccardo, 1995. "How much (a)symmetry in Europe? Evidence from industrial sectors," European Economic Review, Elsevier, vol. 39(5), pages 1017-1041, May.
    10. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    11. Tamim Bayoumi & Eswar Prasad, 1997. "Currency Unions, Economic Fluctuations, and Adjustment: Some New Empirical Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 36-58, March.
    12. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 111-143, June.
    13. Andrea Boltho, 1994. "A comparison of regional differentials in the European Community and the United States," Palgrave Macmillan Books, in: Jørgen Mortensen (ed.), Improving Economic and Social Cohesion in the European Community, chapter 4, pages 41-53, Palgrave Macmillan.
    14. Eichengreen, B., 1992. "Should the Maastricht Treaty be Saved?," Princeton Studies in International Economics 74, International Economics Section, Departement of Economics Princeton University,.
    15. Bayoumi, Tamim & Prasad, Eswar, 1995. "Currency Unions, Economic Fluctuations and Adjustment: Some Empirical Evidence," CEPR Discussion Papers 1172, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abraham, Filip, 1996. "Regional adjustment and wage flexibility in the European Union," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 51-75, February.
    2. Raúl Ramos & Miquel Clar & Jordi Suriñach, 1999. "Specialisation in Europe and Asymmetric Shocks: Potential Risks of EMU," Advances in Spatial Science, in: Manfred M. Fischer & Peter Nijkamp (ed.), Spatial Dynamics of European Integration, chapter 4, pages 63-93, Springer.
    3. Marelli, Enrico, 1999. "Convergence and asymmetries in the employment dynamics of the European regions," ERSA conference papers ersa99pa120, European Regional Science Association.
    4. Moller, Joachim, 2001. "Regional Adjustment Dynamics," Discussion Paper Series 26180, Hamburg Institute of International Economics.
    5. Schor, Armand-Denis, 2000. "La théorie des zones monétaires optimales : l’optimum, le praticable, le crédible et le réel," L'Actualité Economique, Société Canadienne de Science Economique, vol. 76(4), pages 545-576, décembre.
    6. Juan Duque & Raúl Ramos & Jordi Suriñach, 2006. "Wages and productivity: the role of labour market institutions in OECD countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 33(4), pages 231-243, September.
    7. Horvath, Julius, 2003. "Optimum currency area theory: A selective review," BOFIT Discussion Papers 15/2003, Bank of Finland Institute for Emerging Economies (BOFIT).
    8. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    9. Salvador Barrios & Marius Brülhart & Robert J.R. Elliott & Marianne Sensier, 2003. "A Tale of Two Cycles: Co‐Fluctuations Between UK Regions and the Euro Zone," Manchester School, University of Manchester, vol. 71(3), pages 265-292, June.
    10. Frankel, Jeffrey A. & Rose, Andrew K., 1996. "Economic Structure and the Decision to Adopt a Common Currency," Center for International and Development Economics Research (CIDER) Working Papers 233436, University of California-Berkeley, Department of Economics.
    11. Barrios, Salvador & Bertinelli, Luisito & Strobl, E. & Teixeira, Antonio-Carlos, 2005. "The dynamics of agglomeration: evidence from Ireland and Portugal," Journal of Urban Economics, Elsevier, vol. 57(1), pages 170-188, January.
    12. Houssa, Romain, 2008. "Monetary union in West Africa and asymmetric shocks: A dynamic structural factor model approach," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 319-347, February.
    13. Mikek, Peter, 2009. "Does trade integration contribute to synchronization of shocks in Europe?," MPRA Paper 101413, University Library of Munich, Germany.
    14. Francis Greene & Kevin Mole, 2004. "Tracking Euro preparations amongst UK SMEs," Applied Economics, Taylor & Francis Journals, vol. 36(14), pages 1537-1546.
    15. Juan Luís Ollero & Raul Ramos & Jordi Suriñach-Caralt, 2001. "Macroeconomic implications of EMU at the regional level," ERSA conference papers ersa01p146, European Regional Science Association.
    16. Damien Neven & Claudine Gouyette & Jean Pisani-Ferry, 1994. "European Integration and Regional Growth," Revue Économique, Programme National Persée, vol. 45(3), pages 703-713.
    17. Galiani, Sebastian & Lamarche, Carlos & Porto, Alberto & Sosa-Escudero, Walter, 2005. "Persistence and regional disparities in unemployment (Argentina 1980-1997)," Regional Science and Urban Economics, Elsevier, vol. 35(4), pages 375-394, July.
    18. Henryk Bak & Sebastian Maciejewski, 2015. "Asymmetric shocks and international risk sharing in the European Monetary Union and the European Union," Bank i Kredyt, Narodowy Bank Polski, vol. 46(6), pages 523-564.
    19. repec:zbw:bofrdp:1997_008 is not listed on IDEAS
    20. Adalbert Winkler, 1994. "The EMS crisis and the prospects for European Monetary Union," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 29(2), pages 68-74, March.
    21. De Grauwe, Paul & Piskorski, Tomasz, 2001. "Union-wide Aggregates versus National Data Based Monetary Policies: Does it Matter for the Eurosystem?," CEPR Discussion Papers 3036, C.E.P.R. Discussion Papers.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mib:wpaper:16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Matteo Pelagatti (email available below). General contact details of provider: https://edirc.repec.org/data/dpmibit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.