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Unemployment Convergence in Transition

Author

Listed:
  • David Katrencik

    (Technical University of Ostrava)

  • Joanna Tyrowicz

    () (Faculty of Economic Sciences, University of Warsaw)

  • Piotr Wójcik

    () (Faculty of Economic Sciences, University of Warsaw)

Abstract

In this paper an attempt is made to inquire the dynamics of regional unemployment rates in transition economies. We use policy relevant NUTS4 unemployment rates for transition economies characterised by both relatively intense (Poland, Slovaka) and relatively mild labour market hardships (namely Czech Republic). We apply diverse analytical techniques to seek traces of convergence, including beta - and sigma-convergence as well as time-series approach. Results in each of the countries suggest no support in favour of beta-type convergence, i.e. convergence of levels. Even controlling for nation-wide labour market outlooks (conditional convergence) does not provide any support for this hypothesis. Further, regions with both very high and very low unemployment show signs of high persistence and low mobility in the national distribution, while the middle ones tend to demonstrate higher mobility and essentially no regional unemployment differentials persistence. This diagnosis is confirmed by sigma-convergence analysis which indicates no general divergence or convergence patterns. Transitions seem to be more frequent, but at the same time less sustainable for middle range districts, while movements up and down the ladder occur frequently for the same districts. Findings allow to define the patterns of local labour market dynamics, pointing to differentiated divergence paths. Importantly, these tendencies persist despite cohesion policies financing schemes, which allocate relatively more resources to deprived regions in all these countries.

Suggested Citation

  • David Katrencik & Joanna Tyrowicz & Piotr Wójcik, 2008. "Unemployment Convergence in Transition," Working Papers 2008-07, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2008-07
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    File URL: http://www.wne.uw.edu.pl/inf/wyd/WP/WNE_WP7.pdf
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    References listed on IDEAS

    as
    1. Christian Bayer & Falko Jüßen, 2007. "Convergence in West German Regional Unemployment Rates," German Economic Review, Verein für Socialpolitik, vol. 8, pages 510-535, November.
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    5. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
    6. Peter Huber, 2007. "Regional Labour Market Developments in Transition: A Survey of the Empirical Literature," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 4(2), pages 263-298, September.
    7. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    8. Thiess Buettner, 2007. "Unemployment disparities and regional wage flexibility: comparing EU members and EU-accession countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(4), pages 287-297, September.
    9. Fábio Augusto Reis Gomes & Cleomar Gomes da Silva, 2006. "Hysteresis Vs. Nairu And Convergence Vs. Divergence: The Behavior Of Regional Unemployment Rates In Brazil," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 161, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    10. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
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    Citations

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    Cited by:

    1. Roberto Patuelli & Norbert Schanne & Daniel A. Griffith & Peter Nijkamp, 2012. "Persistence Of Regional Unemployment: Application Of A Spatial Filtering Approach To Local Labor Markets In Germany," Journal of Regional Science, Wiley Blackwell, vol. 52(2), pages 300-323, May.
    2. Joanna TYROWICZ & Piotr W�JCIK, 2009. "Some Remarks On The Effects Of Active Labour Market Policies In Post-Transition," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 4(2(8)_ Sum).
    3. repec:taf:pocoec:v:28:y:2016:i:4:p:487-519 is not listed on IDEAS
    4. Joanna Tyrowicz & Piotr Wojcik, 2011. "Nonlinear Stochastic Convergence Analysis of Regional Unemployment Rates in Poland," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 3(1), pages 59-79, July.
    5. Joanna Tyrowicz & Tomasz Jeruzalski, 2013. "(In)Efficiency of matching: the case of a post-transition economy," Economic Change and Restructuring, Springer, vol. 46(2), pages 255-275, May.
    6. Piotr Ciżkowicz & Michał Kowalczuk & Andrzej Rzońca, 2016. "Heterogeneous determinants of local unemployment in Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 28(4), pages 487-519, October.
    7. 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.
    8. 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].
    9. Tatiana Blinova & Vladimir Markov & Victor Rusanovskiy, 2015. "Interregional Differentiation of the Youth Unemployment Rate in Russia," ERSA conference papers ersa15p601, European Regional Science Association.
    10. Joanna Tyrowicz & Piotr Wojcik, 2010. "Active Labour Market Policies and Unemployment Convergence in Transition," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 2(1), pages 46-72, January.
    11. Millán Díaz-Foncea & Carmen Marcuello, 2014. "The Relation between Total Employment and Cooperative Employment: A Convergence and Causality Analysis," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(1), pages 71-92, March.

    More about this item

    Keywords

    unemployment; beta-type convergence; sigma-type convergence; stochastic convergence; social cohesion;

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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