Unemployment clusters across Europe's regions and countries
High unemployment and regional inequalities are major concerns for European policy-makers, but so far connections between policies dealing with unemployment and regional inequalities have been few and weak. We think that this should change. This paper documents a regional and transnational dimension to unemployment - i.e., geographical unemployment clusters that do not respect national boundaries. Since the mid 1980s, regions with high or low initial unemployment rates saw little change, while regions with intermediate unemployment moved towards extreme values. During this polarization, nearby regions tended to share similar outcomes due, we argue, to spatially related changes in labour demand. These spatially correlated demand shifts were due in part to initial clustering of low-skilled regions and badly performing industries, but a significant neighbour effect remains even after controlling for these, and the effect is as strong within as it is between nations. We believe this reflects agglomeration effects of economic integration. The new economic geography literature shows how integration fosters employment clusters that need not respect national borders. If regional labour forces do not adjust, regional unemployment polarization with neighbour effects can result. To account for these 'neighbour effects' a cross-regional and transnational dimension should be added to national anti-unemployment policies. Nations should consider policies that encourage regional wage setting, and short distance mobility, and the EU should consider including transnational considerations in its regional policy, since neighbour effects on unemployment mean that an anti-unemployment policy paid for by one region will benefit neighbouring regions. Since local politicians gain no votes or tax revenues from these 'spillovers', they are likely to underestimate the true benefit of the policy and thus tend to undertake too little of it. Copyright (c) CEPR, CES, MSH, 2002.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 17 (2002)
Issue (Month): 34 (04)
|Contact details of provider:|| Postal: 3rd Floor, 77 Bastwick Street, London EC1V 3PZ|
Phone: +44 (0)20 7183 8801
Fax: +44 (0)20 7183 8820
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0266-4658
More information through EDIRC
Postal:Schackstr. 4, 80539 Munich
Phone: +49 (89) 2180-2748
Fax: +49 (89) 39 73 03
Web page: http://www.cesifo-group.de/portal/page/portal/ifoHome/f-about/f2aboutces
More information through EDIRC
Postal:48 boulevard Jourdan - 75014 Paris
Phone: 01 43 13 63 00
Fax: 01 43 13 63 10
Web page: http://www.pse.ens.fr/
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0266-4658|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joan-Maria Esteban & Debraj Ray, 1991.
"On the Measurement of Polarization,"
Boston University - Institute for Economic Development
18, Boston University, Institute for Economic Development.
- Esteban, J.M. & Ray, D., 1992. "On the Measurement of Polarization," UFAE and IAE Working Papers 171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Esteban, J. & Ray, D., 1993. "On the Measurement of Polarization," UFAE and IAE Working Papers 221.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780199279173, December.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, December.
- Quah, Danny, 1996. "Regional Convergence Clusters Across Europe," CEPR Discussion Papers 1286, C.E.P.R. Discussion Papers.
- Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, December.
- Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
- Fujita, Masahisa & Krugman, Paul, 1995. "When is the economy monocentric?: von Thunen and Chamberlin unified," Regional Science and Urban Economics, Elsevier, vol. 25(4), pages 505-528, August.
- Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
- Paul Cheshire & G. Carbonaro, 1996. "Urban Economic Growth in Europe: Testing Theory and Policy Prescriptions," Urban Studies, Urban Studies Journal Limited, vol. 33(7), pages 1111-1128, August.
- Costas Megir & Danny Quah, 1996. "Regional Convergence Clusters Across Europe," CEP Discussion Papers dp0274, Centre for Economic Performance, LSE.
When requesting a correction, please mention this item's handle: RePEc:bla:ecpoli:v:17:y:2002:i:34:p:115-148. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.