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Human capital and labour market resilience over time: a regional perspective of the Portuguese case

Author

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  • Marta SIMÕES

    (University of Coimbra, Faculty of Economics and a researcher affiliated with CeBER, Portugal)

  • João Sousa ANDRADE

    (University of Coimbra, Faculty of Economics and a researcher affiliated with CeBER, Portugal)

  • Adelaide DUARTE

    (University of Coimbra, Faculty of Economics and a researcher affiliated with CeBER, Portugal)

Abstract

This study examines the link between human capital and labour market resilience in the seven Portuguese NUTS-2 regions over the period 1995-2018. We use the Local Projection methodology (LPM) to estimate a SVAR model with three variables (employment, human capital, output) conditioning the response of the labour market to two scenarios depending on whether a shock to GDP occurs during recessions or during expansions, with output gap as the switching variable for the identification of recession and expansion regimes. The comparison of the employment responses to GDP shocks between the two regimes is informative about the degree of resilience of the labour market. We find evidence of: (i) distinct effects in terms of the sign and amplitude of GDP shocks on regional employment according to the level of educational attainment of employees; (ii) labour market resilience but jobless recoveries in several regions; and (iii) different regional reactions of human capital to GDP shocks depending on the regime.

Suggested Citation

  • Marta SIMÕES & João Sousa ANDRADE & Adelaide DUARTE, 2022. "Human capital and labour market resilience over time: a regional perspective of the Portuguese case," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 13, pages 26-59, June.
    • Handle: RePEc:jes:journl:y:2022:v:13:p:26-59
    DOI: https://doi.org/10.47743/ejes-2022-0102
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    References listed on IDEAS

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    1. Alan J. Auerbach & Yuriy Gorodnichenko, 2012. "Measuring the Output Responses to Fiscal Policy," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 1-27, May.
    2. Leonida CORREIA & Marina ALVES, 2017. "Regional Employment In Portugal: Differences And Cyclical Synchronisation," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 159-175, December.
    3. Paolo Di Caro, 2017. "Testing and explaining economic resilience with an application to Italian regions," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 93-113, March.
    4. Alan J. Auerbach & Yuriy Gorodnichenko, 2013. "Corrigendum: Measuring the Output Responses to Fiscal Policy," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 320-322, August.
    5. Diana A. Cooke & M. Ayhan Kose & Christopher Otrok & Michael T. Owyang, 2015. "Regional vs. Global: How Are Countries' Business Cycles Moving Together These Days?," The Regional Economist, Federal Reserve Bank of St. Louis, issue April.
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    Cited by:

    1. Bogdan-Constantin Ibanescu & Alexandra Gheorghiu & Mioara Cristea & Gabriela Carmen Pascariu, 2023. "The Evolution of Job Insecurity in Spatial Contexts in Europe During COVID-19 Pandemic," International Regional Science Review, , vol. 46(5-6), pages 552-576, September.

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    Keywords

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    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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