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Regional Unemployment in the EU before and after the Global Crisis

  • 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)

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.

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File URL: http://www.rcfea.org/RePEc/pdf/wp39_11.pdf
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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 39_11.

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Date of creation: Sep 2011
Date of revision: Jan 2012
Publication status: Published in Post-Communist Economies 24 (2): 155-75
Handle: RePEc:rim:rimwps:39_11
Contact details of provider: Postal: Via Patara, 3, 47921 Rimini (RN)
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