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Divergence and long-run equilibria in Italian regional unemployment

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  • Mauro Costantini
  • Claudio Lupi

Abstract

The Italian labour market is characterized by large and persistent regional unemployment differentials. This study uses recent panel unit root and cointegration tests to derive the long-run properties of the Italian regional unemployment disparities. The empirical evidence suggests that the stochastic convergence hypothesis can be rejected. However, the existence of a long-run equilibrium relationship among regional unemployment rates cannot be excluded. Some possible implications of this finding are sketched.

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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 14 ()
Pages: 899-904

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:14:p:899-904
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  1. Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2000. "Regional Disparities and the Italian NAIRU," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 146-77, January.
  2. Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2001. "Widening differences in Italian regional unemployment," Labour Economics, Elsevier, vol. 8(1), pages 103-129, January.
  3. Maria De Paola & Claudio Lupi & Patrizia Ordine, 2005. "Wage expectations in northern and southern Italian regions: An interpretation based on psychological and social factors," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 343-358.
  4. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 237-252.
  5. Faini, Riccardo & Galli, Giampaolo & Gennari, Pietro & Rossi, Fulvio, 1997. "An empirical puzzle: Falling migration and growing unemployment differentials among Italian regions," European Economic Review, Elsevier, vol. 41(3-5), pages 571-579, April.
  6. Giorgio Di Pietro & Peter Urwin, 2003. "Intergenerational mobility and occupational status in Italy," Applied Economics Letters, Taylor & Francis Journals, vol. 10(12), pages 793-797.
  7. T. Mora, 2004. "Role of mobility in evolution of disparities: European regions evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 11(5), pages 325-328.
  8. Oxley, Les & Greasley, David, 1995. "A Time-Series Perspective on Convergence: Australia, UK and USA since 1870," The Economic Record, The Economic Society of Australia, vol. 71(214), pages 259-70, September.
  9. Adolfo Maza & Jose Villaverde, 2004. "Regional disparities in the EU: mobility and polarization," Applied Economics Letters, Taylor & Francis Journals, vol. 11(8), pages 517-522.
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Cited by:

  1. Joshua D. Angrist & Erich Battistin & Daniela Vuri, 2014. "In a Small Moment: Class Size and Moral Hazard in the Mezzogiorno," FBK-IRVAPP Working Papers 2014-04, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
  2. 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].
  3. Bai, Jushan & Carrion-i-Silvestre, Josep Lluis, 2009. "Testing Panel Cointegration with Unobservable Dynamic Common Factors," MPRA Paper 35243, University Library of Munich, Germany.
  4. Werner, Daniel, 2014. "New insights into the development of regional unemployment disparities," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100416, Verein für Socialpolitik / German Economic Association.
  5. Jushan Bai & Josep Lluís Carrion‐i‐Silvestre, 2013. "Testing panel cointegration with unobservable dynamic common factors that are correlated with the regressors," Econometrics Journal, Royal Economic Society, vol. 16(2), pages 222-249, 06.
  6. Firouz Fallahi & Gabriel Rodríguez, 2011. "Convergence In The Canadian Provinces: Evidence Using Unemployment Rates," Documentos de Trabajo / Working Papers 2011-322, Departamento de Economía - Pontificia Universidad Católica del Perú.

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