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Unemployment Rates At the Regional and National Levels of the European Union: An Integrated Analysis

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  • Annette Zeilstra

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  • Paul Elhorst

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Abstract

This study investigates the causes of variation in regional unemployment rates in a cross-country perspective. The explanatory variables consist of both regional-level and macro-level variables. An appropriate econometric model of random coefficients for the former and fixed coefficients for the latter variables is developed, further taking into account that observations may be correlated over time and over space and that some of the explanatory variables are not strictly exogenous. On the basis of this model a regional unemployment rate equation is estimated, using data of 143 regions across 11 EU countries derived from Eurostat, 1983-1997, and national data on labour market institutions predominantly derived from the OECD.

Suggested Citation

  • Annette Zeilstra & Paul Elhorst, 2006. "Unemployment Rates At the Regional and National Levels of the European Union: An Integrated Analysis," ERSA conference papers ersa06p73, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa06p73
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa06/papers/73.pdf
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    References listed on IDEAS

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    1. Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October.
    2. Belot, Michele & van Ours, Jan C., 2001. "Unemployment and Labor Market Institutions: An Empirical Analysis," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 403-418, December.
    3. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
    4. Swamy, P A V B, 1970. "Efficient Inference in a Random Coefficient Regression Model," Econometrica, Econometric Society, vol. 38(2), pages 311-323, March.
    5. Frees,Edward W., 2004. "Longitudinal and Panel Data," Cambridge Books, Cambridge University Press, number 9780521828284.
    6. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
    7. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461 Elsevier.
    8. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD Publishing.
    9. Taylor, Jim & Bradley, Steve, 1997. "Unemployment in Europe: A Comparative Analysis of Regional Disparities in Germany, Italy and the UK," Kyklos, Wiley Blackwell, vol. 50(2), pages 221-245.
    10. J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 709-748, December.
    11. Balestra, Pietro & Negassi, Syoum, 1992. "A Random Coefficient Simultaneous Equation System with an Application to Direct Foreign Investment by French Firms," Empirical Economics, Springer, vol. 17(1), pages 205-220.
    12. Frees,Edward W., 2004. "Longitudinal and Panel Data," Cambridge Books, Cambridge University Press, number 9780521535380.
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    Cited by:

    1. Reiner, Christian, 2010. "Regionale Arbeitsmärkte in der „Großen Rezession“: Dynamik regionaler Arbeitslosenquoten in Deutschland, Frankreich und Großbritannien im Krisenjahr 2009," Working Papers in Economics 2010-9, University of Salzburg.
    2. Reiner Christian, 2010. "Die „Große Rezession“ und ihre Auswirkungen auf regionale Arbeitslosenquoten," Zeitschrift für Wirtschaftsgeographie, De Gruyter, vol. 54(1), pages 114-133, October.

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