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Regional Unemployment in the EU before and after the Global Crisis

Author

Listed:
  • Enrico Marelli

    () (Department of Economics, Faculty of Economics, University of Brescia, Italy)

  • Roberto Patuelli

    () (Department of Economics, Faculty of Economics-Rimini, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy)

  • Marcello Signorelli

    () (Department of Economics, Finance and Statistics, Faculty of Political Sciences, University of Perugia, Italy)

Abstract

In this paper, we have empirically assessed the evolution of European regions in terms of both employment and unemployment during the recent financial crisis and Global Recession. Our specific research questions were as follows: (i) has there been a reversal in employment and unemployment dynamics at a regional level, during the crisis (2007–10) compared to the previous period (2004–07)? (ii) have the western regions in ‘old’ EU states behaved differently in response to the crisis compared with the eastern regions of the NMS? Finally, (iii) are the differences between the two groups of regions related to structural or institutional variables? After a review of the literature on the key determinants of regional unemployment, we have summarized our main findings concerning the Global Crisis' impact on the labour market. Our econometric investigation aimed to answer the questions we have posed. Structural characteristics have been considered in terms of sector specialization of regional economies. In addition, we have considered certain institutional characteristics, by including indicators of the share of temporary workers and of long-term unemployed. Our analysis has then been targeted at the sub-samples of western- and eastern-European regions: we show that the critical factors for labour market performance during the crisis in these two groups differs greatly. From a methodological viewpoint, we have exploited a spatial filtering technique which allowed us to greatly reduce any unobserved variable bias – a significant problem in cross-sectional models – by accounting for latent unobserved spatial patterns.

Suggested Citation

  • Enrico Marelli & Roberto Patuelli & Marcello Signorelli, 2011. "Regional Unemployment in the EU before and after the Global Crisis," Working Paper series 39_11, Rimini Centre for Economic Analysis, revised Jan 2012.
  • Handle: RePEc:rim:rimwps:39_11
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    References listed on IDEAS

    as
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    Keywords

    crisis; employment; unemployment; European Union; NUTS-2; spatial filtering; sectoral composition; spatially heterogeneous parameters;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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