Employment Policy for Regional Labor Markets

In the past, considerable attention has been paid to the global economic and social consequences of high and persistent unemployment. Regional or spatial aspects did not receive nearly as much attention. However, high unemployment rates tend to generate their own spatial dynamics. Thus a process of differentiation in the labor market takes place at two levels: First, via the spatial polarization of opportunies to earn income; second, via the incidence of high and persistent unemployment affecting particular groups, especially in ‘problem regions’, that is, in regions with high unemployment. As a consequence, ‘problem groups' of the unemployed face persistent and much higher levels of unemployment in those regions. An employment policy which attempts to operate via the demand for labor should necessarily take note of the peculiarities of each region. Thus it must be selective and specific rather than global and general in nature. Therefrom results the need for a better consideration of structural factors, such as sectoral structure, industry mix, size of enterprise, and type of enterprise, all of which influence the regional employment situation. The paper attempts to explain persistent differences in regional unemployment in terms of the regional economic structure.