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Regional disparities in a small country? An assessment of the regional dimension to the Dutch labour market on the basis of regional unemployment and participation differentials

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  • Wouter Vermeulen

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    Abstract

    This paper explores regional unemployment and participation data that distinguish gender, age and educational attainment. We observe a panel of 40 Dutch regions over the period 1992 - 2003. Issues such as the national component in regional labour market developments, the role of the labour force composition and persistence of unemployment and participation differentials are considered. A dominance of national unemployment and participation on regional outcomes is found, suggesting a modest regional component to labour market dynamics in the Netherlands. Composition of the potential labour force does not fully account for the remaining differences however. There exists a regional component to unemployment for lower educated, for example. We find that persistence of regional unemployment and participation differentials may be explained to some extent by persistence of regional differences in labour force composition. Persistence of these differentials is strong for lower educated but almost absent for higher educated persons, suggesting that the labour market for the higher educated clears at the national rather than the regional level. Finally, we investigate the effect of unemployment on labour participation. Unlike other recent evidence, our results yield little support for a “discouraged worker effect”. For all population groups, the relationship is statistically insignificant when we control for time-invariant and region-invariant heterogeneity.

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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p207.

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    Date of creation: Aug 2005
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    Handle: RePEc:wiw:wiwrsa:ersa05p207

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    1. Stephen Fothergill, 2001. "The True Scale of the Regional Problem in the UK," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(3), pages 241-246.
    2. Lourens Broersma & Jouke van Dijk, 2002. "Regional labour market dynamics in the Netherlands," Papers in Regional Science, Springer, Springer, vol. 81(3), pages 343-364.
    3. Paolo Mauro & Antonio Spilimbergo, 1998. "How Do the Skilled and the Unskilled Respond to Regional Shocks? the Case of Spain," IMF Working Papers, International Monetary Fund 98/77, International Monetary Fund.
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    5. Diego Puga, 1999. "Unemployment clusters across Europe's regions and countries," Working Papers, University of Toronto, Department of Economics dpuga-99-03, University of Toronto, Department of Economics.
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    8. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
    9. Wouter Vermeulen & Jos van Ommeren, 2004. "Interaction of Regional Population and Employment," Tinbergen Institute Discussion Papers, Tinbergen Institute 04-083/3, Tinbergen Institute.
    10. Christina Beatty & Stephen Fothergill, 2002. "Hidden Unemployment Among Men: A Case Study," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(8), pages 811-823.
    11. Decressin, Jörg & Fatás, Antonio, 1994. "Regional Labour Market Dynamics in Europe," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1085, C.E.P.R. Discussion Papers.
    12. Lambert Van Der Laan & Richard Schalke, 2001. "Reality versus Policy: The Delineation and Testing of Local Labour Market and Spatial Policy Areas," European Planning Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 9(2), pages 201-221, March.
    13. O'Leary, Nigel C. & Murphy, Philip D. & Latreille, Paul L. & Blackaby, David H. & Sloane, Peter J., 2005. "Accounting for Differences in Labour Market Outcomes in Great Britain: A Regional Analysis Using the Labour Force Survey," IZA Discussion Papers 1501, Institute for the Study of Labor (IZA).
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