Unemployment Clusters Across European Regions and Countries

Puga, Diego; Overman, Henry G.

doi:10.2139/ssrn.180857

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Unemployment Clusters Across European Regions and Countries

London School of Economics CEP Working Paper No. 434

37 Pages Posted: 27 Nov 1999

See all articles by Diego Puga

Diego Puga

IMDEA Social Sciences; University of Toronto - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Henry G. Overman

London School of Economics (LSE) - Department of Geography and Environment; Centre for Economic Policy Research (CEPR)

Date Written: July 1999

Abstract

European regions have experienced a polarisation of their unemployment rates between 1986 and 1996, as regions with intermediate rates have moved towards either extreme. This process has been driven by changes in regional employment, only partly offset by labour force changes. Regions' outcomes have closely followed those of neighbouring regions. This is only weakly explained by regions being part of the same Member State, having a similar skill composition, or broad sectoral specialisation. Even more surprisingly, foreign neighbours matter as much as domestic neighbours. All of this suggests a reorganisation of economic activities with increasing disregard for national borders.

JEL Classification: R12, E24, F15

Suggested Citation: Suggested Citation

Puga, Diego and Overman, Henry G., Unemployment Clusters Across European Regions and Countries (July 1999). London School of Economics CEP Working Paper No. 434, Available at SSRN: https://ssrn.com/abstract=180857 or http://dx.doi.org/10.2139/ssrn.180857