Is There a Southern-Sclerosis? Worker Reallocation and Regional Unemployment in Italy

34 Pages Posted: 3 Nov 2012

See all articles by Chiara Mussida

Chiara Mussida

Università Cattolica del Sacro Cuore

Francesco Pastore

Seconda Università di Napoli - Dipartimento di Discipline Giuridiche ed Economiche Italiane Europee e Comparate; IZA Institute of Labor Economics

Abstract

Theoretical reasoning justifies different signs of the relationship between the local variation in unemployment rates and the extent of workers reallocation. This paper aims to test different theoretical hypotheses in the case of Italy by using the longitudinal files of the Italian labour force survey over the years from 2004 to 2010. We find that labour turnover, as well as inflows and outflows separately, differ significantly at the regional level and are ceteris paribus positively related to the unemployment rate. In addition, we study the determinants of labour turnover across NUTS1 and NUTS2 geographical units and find that it correlates positively with structural change, as measured by the Lilien index, and negatively with the degree of industrial concentration, as measured by the Herfindahl index. Once we control for sectoral shifts and industrial concentration, we note a reduction of between 25 and 40% of the regional gap in labour turnover rates. This general conclusion is robust to the use of different control variables.

Keywords: regional unemployment, labour turnover, labour reallocation, structural change

JEL Classification: C33, J63, P25, P52, R23

Suggested Citation

Mussida, Chiara and Pastore, Francesco, Is There a Southern-Sclerosis? Worker Reallocation and Regional Unemployment in Italy. IZA Discussion Paper No. 6954, Available at SSRN: https://ssrn.com/abstract=2170642

Chiara Mussida (Contact Author)

Università Cattolica del Sacro Cuore ( email )

Emilia Parmense, 84
Piacenza, PC 29122
Italy

Francesco Pastore

Seconda Università di Napoli - Dipartimento di Discipline Giuridiche ed Economiche Italiane Europee e Comparate ( email )

Via Antonio Vivaldi, 43
Caserta CE, Caserta 81100
Italy

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