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Regional labor markets in Finland: Adjustment to total versus region-specific shocks

Author

Listed:
  • Sari Pekkala

    (School of Business and Economics, University of Jyväskylä, P.O. Box 35, FIN-40351 Jyväskylä, Finland)

  • Aki Kangasharju

    (Government Institute for Economic Research, Hämeentie 3, FIN-00531 Helsinki, Finland)

Abstract

This article analyses regional labor market adjustment in the Finnish provinces during 1976-2000. We investigate the inter-relations of employment, unemployment, labor force participation, and migration to see how a change in region-specific and total labor demand is adjusted. The analysis reveals that region-specific labor demand shocks adjust mainly via participation, whereas total shocks are adjusted by unemployment. The region-specific component of labor demand shock has shorter-lived effects on unemployment and participation, but its effect on employment is permanent. Conversely, total shocks leave no permanent effect. Migration is more important in the region-specific case where, after a few years, it acquires a large role in the adjustment process.

Suggested Citation

  • Sari Pekkala & Aki Kangasharju, 2002. "Regional labor markets in Finland: Adjustment to total versus region-specific shocks," Papers in Regional Science, Springer;Regional Science Association International, vol. 81(3), pages 329-342.
    • Handle: RePEc:spr:presci:v:81:y:2002:i:3:p:329-342
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    Citations

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    Cited by:

    1. Peter Huber, 2018. "The Role of Migration as Adjustment Mechanism in the Crisis and EMU," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(6), pages 1497-1508.
    2. 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.
    3. Shu‐hen Chiang, 2012. "The sources of metropolitan unemployment fluctuations in the Greater Taipei metropolitan area," Papers in Regional Science, Wiley Blackwell, vol. 91(4), pages 775-793, November.
    4. Edward Nissan & Shahdad Naghshpour, 2014. "Comparing U.S. regions for selected economic and financial variables," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(3), pages 528-540, July.
    5. Timothy J. Bartik, 2015. "How Effects of Local Labor Demand Shocks Vary with the Initial Local Unemployment Rate," Growth and Change, Wiley Blackwell, vol. 46(4), pages 529-557, December.
    6. Petri Böckerman & Kari Hämäläinen & Mika Maliranta, 2004. "Sources of Job and Worker Flows: Evidence from a Panel of Regions," LABOUR, CEIS, vol. 18(1), pages 105-129, March.
    7. Farhang Niroomand & Edward Nissan, 2007. "Socio-Economic Gaps within the EU: A Comparison," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 13(3), pages 365-378, August.
    8. Harald Oberhofer & Christian Glocker & Werner Hölzl & Peter Huber & Serguei Kaniovski & Klaus Nowotny & Michael Pfaffermayr & Monique Ebell & Nikolaos Kontogiannis, 2016. "Single Market Transmission Mechanisms Before, During and After the 2008-09 Crisis. A Quantitative Assessment," WIFO Studies, WIFO, number 59156, March.
    9. repec:kap:iaecre:v:13:y:2007:i:3:p:365-378 is not listed on IDEAS

    More about this item

    Keywords

    Labor market; employment; unemployment; migration; shock adjustment;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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