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Convergence in West German Regional Unemployment Rates

Author

Listed:
  • Bayer Christian

    (Universität Dortmund,Dortmund, Germany)

  • Jüßen Falko

    (Universität Dortmund,Dortmund, Germany)

Abstract

Differences in regional unemployment rates are often used to describe regional economic inequality. This paper asks whether changes in regional unemployment differences in West Germany are persistent over time. Understanding the persistency of regional unemployment differences helps us to assess how effective regional policy can be. While univariate tests suggest that changes in regional unemployment differences are persistent in West Germany, more powerful panel tests lend some support to the hypothesis that regional unemployment rates converge. However, these tests reveal a moderate speed of convergence at best. Because there is a structural break following the second oil crisis, we also use tests that allow for such a break. This provides evidence for both convergence and quick adjustment to an equilibrium distribution of regional unemployment rates that is, however, subject to a structural break.

Suggested Citation

  • Bayer Christian & Jüßen Falko, 2007. "Convergence in West German Regional Unemployment Rates," German Economic Review, De Gruyter, vol. 8(4), pages 510-535, December.
    • Handle: RePEc:bpj:germec:v:8:y:2007:i:4:p:510-535
    DOI: 10.1111/j.1468-0475.2007.00416.x
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    Cited by:

    1. Simionescu, Mihaela, 2022. "Stochastic convergence in per capita energy use in the EU-15 countries. The role of economic growth," Applied Energy, Elsevier, vol. 322(C).
    2. Giovanni Russo & Federico Tedeschi & Aura Reggiani & Peter Nijkamp, 2014. "Commuter Effects on Local Labour Markets: A German Modelling Study," Urban Studies, Urban Studies Journal Limited, vol. 51(3), pages 493-508, February.
    3. Joanna Tyrowicz & Piotr Wojcik, 2011. "Nonlinear Stochastic Convergence Analysis of Regional Unemployment Rates in Poland," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 3(1), pages 59-79, July.
    4. Bernd Aumann & Rolf Scheufele, 2010. "Is East Germany catching up? A time series perspective," Post-Communist Economies, Taylor & Francis Journals, vol. 22(2), pages 177-192.
    5. Alka Obadić & Vladimir Arčabić & Lucija Rogić Dumančić, 2021. "Labor market institutions convergence in the European Union," EFZG Working Papers Series 2102, Faculty of Economics and Business, University of Zagreb.
    6. László Kónya, 2020. "Did the unemployment rates converge in the EU?," Empirical Economics, Springer, vol. 59(2), pages 627-657, August.
    7. Natalia PRESSMAN & Vadim KLEPFISH, 2008. "Regional Unemployment Rate Convergence in Israel," EcoMod2008 23800110, EcoMod.
    8. Werner, Daniel, 2013. "New insights into the development of regional unemployment disparities," IAB-Discussion Paper 201311, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Mark D. Partridge & Dan S. Rickman & M. Rose Olfert & Ying Tan, 2015. "When Spatial Equilibrium Fails: Is Place-Based Policy Second Best?," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1303-1325, August.
    10. Fábio Augusto Reis Gomes & Cleomar Gomes da Silva, 2006. "Hysteresis Vs. Nairu And Convergence Vs. Divergence: The Behavior Of Regional Unemployment Rates In Brazil," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 161, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    11. Mihaela Simionescu & Wadim Strielkowski & Nicolas Schneider & Luboš Smutka, 2022. "Convergence behaviours of energy series and GDP nexus hypothesis: A non-parametric Bayesian application," PLOS ONE, Public Library of Science, vol. 17(8), pages 1-25, August.
    12. Joanna Tyrowicz & Piotr Wójcik, 2010. "Unemployment Convergence in Transition," Studies in Economic Transition, in: Enrico Marelli & Marcello Signorelli (ed.), Economic Growth and Structural Features of Transition, chapter 11, pages 236-259, Palgrave Macmillan.
    13. Hans-Friedrich Eckey & Reinhold Kosfeld & Matthias Türck, 2007. "Regional Convergence in Germany: a Geographically Weighted Regression Approach," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 45-64.
    14. Roberto Patuelli & Norbert Schanne & Daniel A. Griffith & Peter Nijkamp, 2012. "Persistence Of Regional Unemployment: Application Of A Spatial Filtering Approach To Local Labor Markets In Germany," Journal of Regional Science, Wiley Blackwell, vol. 52(2), pages 300-323, May.
    15. Tatiana Blinova & Vladimir Markov & Victor Rusanovskiy, 2015. "Interregional Differentiation of the Youth Unemployment Rate in Russia," ERSA conference papers ersa15p601, European Regional Science Association.
    16. Cesar Sobrino, 2022. "The persistence of regional disparities in labor markets: Evidence from Puerto Rico," Economics Bulletin, AccessEcon, vol. 42(4), pages 1728-1741.
    17. Roberto Patuelli & Daniel A. Griffith & Michael Tiefelsdorf & Peter Nijkamp, 2011. "Spatial Filtering and Eigenvector Stability: Space-Time Models for German Unemployment Data," International Regional Science Review, , vol. 34(2), pages 253-280, April.
    18. Joanna Tyrowicz & Piotr Wojcik, 2010. "Active Labour Market Policies and Unemployment Convergence in Transition," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 2(1), pages 46-72, January.
    19. Joanna Tyrowicz & Piotr Wójcik, 2007. "Konwergencja bezrobocia w Polsce w latach 1999-2006," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 1-20.
    20. Roberta Colavecchio & Declan Curran & Michael Funke, 2009. "Drifting together or falling apart? The empirics of regional economic growth in post-unification Germany," Applied Economics, Taylor & Francis Journals, vol. 43(9), pages 1087-1098.
    21. Darja Borsic & Alenka Kavkler, 2009. "Duration of Regional Unemployment Spells in Slovenia," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(2), pages 123-146.
    22. Yegnanew A Shiferaw, 2025. "Unravelling the spatiotemporal dynamics of unemployment rates in district municipalities in South Africa: A disaggregated analysis for informed policymaking," ERSA Working Paper Series, Economic Research Southern Africa, vol. 0, pages 1-41.

    More about this item

    Keywords

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    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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