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Unemployment Rates At the Regional and National Levels of the European Union: An Integrated Analysis

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Annette Zeilstra ()
Paul Elhorst ()

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Abstract

This study investigates the causes of variation in regional unemployment rates in a cross-country perspective. The explanatory variables consist of both regional-level and macro-level variables. An appropriate econometric model of random coefficients for the former and fixed coefficients for the latter variables is developed, further taking into account that observations may be correlated over time and over space and that some of the explanatory variables are not strictly exogenous. On the basis of this model a regional unemployment rate equation is estimated, using data of 143 regions across 11 EU countries derived from Eurostat, 1983-1997, and national data on labour market institutions predominantly derived from the OECD.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p73.

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Date of creation: Aug 2006
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Handle: RePEc:wiw:wiwrsa:ersa06p73

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  1. Belot, M.V.K. & Ours, J.C. van, 2001. "Unemployment and labor market institutions : an empirical analysis," Discussion Paper 50, Tilburg University, Center for Economic Research. [Downloadable!]
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  2. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD, Economics Department. [Downloadable!]
  3. J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Blackwell Publishing, vol. 17(5), pages 709-748, December. [Downloadable!] (restricted)
  4. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
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  5. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461 Elsevier. [Downloadable!] (restricted)
  6. Balestra, Pietro & Negassi, Syoum, 1992. "A Random Coefficient Simultaneous Equation System with an Application to Direct Foreign Investment by French Firms," Empirical Economics, Springer, vol. 17(1), pages 205-20.
  7. Taylor, Jim & Bradley, Steve, 1997. "Unemployment in Europe: A Comparative Analysis of Regional Disparities in Germany, Italy and the UK," Kyklos, Blackwell Publishing, vol. 50(2), pages 221-45.
  8. Nickell, Stephen, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer. [Downloadable!] (restricted)
  9. Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October. [Downloadable!] (restricted)
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  10. Swamy, P A V B, 1970. "Efficient Inference in a Random Coefficient Regression Model," Econometrica, Econometric Society, vol. 38(2), pages 311-23, March. [Downloadable!] (restricted)
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