IDEAS home Printed from
   My bibliography  Save this article

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


  • 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)


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

    Download full text from publisher

    File URL:
    Download Restriction: Access to the full text of the articles in this series is restricted

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. ten Raa, Thijs & Wolff, Edward N., 2000. "Engines of growth in the US economy," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 473-489, December.
    2. Robert Stehrer, 2001. "Industrial specialisation, trade, and labour market dynamics in a multisectoral model of technological progress," Computing in Economics and Finance 2001 230, Society for Computational Economics.
    3. Meller, Patricio & Marfan, Manuel, 1981. "Small and Large Industry: Employment Generation, Linkages, and Key Sectors," Economic Development and Cultural Change, University of Chicago Press, vol. 29(2), pages 263-274, January.
    4. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    5. Keld Laursen & Valentina Meliciani, 2002. "The relative importance of international vis-ý-vis national technological spillovers for market share dynamics," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 875-894, August.
    6. Erik Dietzenbacher & Alex R. Hoen & Bart Los, 2000. "Labor Productivity in Western Europe 1975-1985: An Intercountry, Interindustry Analysis," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 425-452.
    7. Bart Los & Bart Verspagen, 2006. "The Evolution Of Productivity Gaps And Specialization Patterns," Metroeconomica, Wiley Blackwell, vol. 57(4), pages 464-493, November.
    8. Bart Los, 2001. "Endogenous Growth and Structural Change in a Dynamic Input-Output Model," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 3-34.
    9. repec:jns:jbstat:v:182:y:1968:i:1:p:211-215:n:14 is not listed on IDEAS
    10. Bart Los & Bart Verspagen, 2000. "R&D spillovers and productivity: Evidence from U.S. manufacturing microdata," Empirical Economics, Springer, vol. 25(1), pages 127-148.
    11. Jan Fagerberg, 1999. "The Economic Challenge for Europe: Adapting to Innovation-Based Growth," Working Papers 2, Centre for Technology, Innovation and Culture, University of Oslo.
    12. Soete, Luc & Verspagen, Bart & ter Weel, Bas, 2010. "Systems of Innovation," Handbook of the Economics of Innovation, Elsevier.
    13. Zvi Griliches, 1998. "The Search for R&D Spillovers," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 251-268 National Bureau of Economic Research, Inc.
    14. Dietzenbacher, Erik, 1992. "The measurement of interindustry linkages : Key sectors in the Netherlands," Economic Modelling, Elsevier, vol. 9(4), pages 419-437, October.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. repec:kap:iaecre:v:13:y:2007:i:3:p:365-378 is not listed on IDEAS

    More about this item


    Labor market; employment; unemployment; migration; shock adjustment;

    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


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:presci:v:81:y:2002:i:3:p:329-342. 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: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.