Abstract

http://ssrn.com/abstract=2043373
 
 

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Persistence of Regional Unemployment: Application of a Spatial Filtering Approach to Local Labor Markets in Germany


Roberto Patuelli


University of Bologna - Department of Economics; University of Bologna - Rimini Center for Economic Analysis (RCEA)

Norbert Schanne


Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Daniel A. Griffith


University of Texas at Dallas - School of Economic, Political and Policy Sciences

Peter Nijkamp


VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute - Tinbergen Institute Amsterdam (TIA)

May 2012

Journal of Regional Science, Vol. 52, Issue 2, pp. 300-323, 2012

Abstract:     
The geographical distribution and persistence of regional/local unemployment rates in heterogeneous economies (such as Germany) have been, in recent years, the subject of various theoretical and empirical studies. Several researchers have shown an interest in analyzing the dynamic adjustment processes of unemployment and the average degree of dependence of the current unemployment rates or gross domestic product from the ones observed in the past. In this paper, we present a new econometric approach to the study of regional unemployment persistence, in order to account for spatial heterogeneity and/or spatial autocorrelation in both the levels and the dynamics of unemployment. First, we propose an econometric procedure suggesting the use of spatial filtering techniques as a substitute for fixed effects in a panel estimation framework. The spatial filter computed here is a proxy for spatially distributed region‐specific information (e.g., the endowment of natural resources, or the size of the “home market”) that is usually incorporated in the fixed effects coefficients. The advantages of our proposed procedure are that the spatial filter, by incorporating region‐specific information that generates spatial autocorrelation, frees up degrees of freedom, simultaneously corrects for time‐stable spatial autocorrelation in the residuals, and provides insights about the spatial patterns in regional adjustment processes. We present several experiments in order to investigate the spatial pattern of the heterogeneous autoregressive coefficients estimated for unemployment data for German NUTS‐3 regions. We find widely heterogeneous but generally high persistence in regional unemployment rates.

Number of Pages in PDF File: 24

Accepted Paper Series





Date posted: April 21, 2012  

Suggested Citation

Patuelli, Roberto and Schanne, Norbert and Griffith, Daniel A. and Nijkamp, Peter, Persistence of Regional Unemployment: Application of a Spatial Filtering Approach to Local Labor Markets in Germany (May 2012). Journal of Regional Science, Vol. 52, Issue 2, pp. 300-323, 2012. Available at SSRN: http://ssrn.com/abstract=2043373 or http://dx.doi.org/10.1111/j.1467-9787.2012.00759.x

Contact Information

Roberto Patuelli (Contact Author)
University of Bologna - Department of Economics ( email )
via Anghera' 22
Rimini, 47921
Italy
+39-0541-434276 (Phone)
+39-02-700419665 (Fax)
HOME PAGE: http://www2.dse.unibo.it/patuelli/
University of Bologna - Rimini Center for Economic Analysis (RCEA)
Via Patara, 3
Rimini (RN), RN 47900
Italy
Norbert Schanne
Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )
Regensburger Str. 104
Nuremberg, 90478
Germany
Daniel A. Griffith
University of Texas at Dallas - School of Economic, Political and Policy Sciences ( email )
P.O. Box 830688, GR 31
Richardson, TX 75083
United States
Peter Nijkamp
VU University of Amsterdam - Department of Spatial Economics ( email )
De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)
Tinbergen Institute - Tinbergen Institute Amsterdam (TIA)
Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands
Feedback to SSRN


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References:  56
Citations:  2
Footnotes:  19

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