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

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.

Centralised wage bargaining and regional unemployment

This paper studies regional labour markets in a country with centralised wage bargaining. We use a four-stage theoretical model with two regions and one sector. In the first stage the union and employer federation engage in Nash bargaining at the national level according to a Right To Manage (RTM) model. In the second stage the individual employers determine the number of employees they want to hire given the outcome of the national wage bargaining. In the third stage individuals decide whether or not they want to migrate to another region and if they want to participate in the labour market or not. In the fourth stage the product market clears. In this model, depending on the parameters, the change in participation and the level of migration determine the distribution of unemployment over the regions.

Centralised wage bargaining and regional unemployment

This paper studies regional labour markets in a country with centralised wage bargaining. We use a four-stage theoretical model with two regions and one sector. In the first stage the union and employer federation engage in Nash bargaining at the national level according to a Right To Manage (RTM) model. In the second stage the individual employers determine the number of employees they want to hire given the outcome of the national wage bargaining. In the third stage individuals decide whether or not they want to migrate to another region and if they want to participate in the labour market or not. In the fourth stage the product market clears. In this model, depending on the parameters, the change in participation and the level of migration determine the distribution of unemployment over the regions

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

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

Regional labour markets in a cross-country perspective

Involuntary unemployment continues to be a major policy concern in the European Union. Moreover, raising the labour participation rate has become increasingly important in view of the ageing of the European population. Marked differences in unemployment rates and participation rates exist, not only between European countries, but also within them. Most international studies on unemployment and participation, however, are limited to national data. For that reason they cannot do justice to regional disparities within countries. Most regional studies are in turn restricted to one single country, as a result of which they cannot analyse the effect of different national institutions on unemployment and labour participation. In this thesis both regional and national data of several European countries are used to provide a more balanced analysis of unemployment rates and participation rates. Both theoretical and empirical research is used in order to answer the following research questions: What is the effect of both regional and national variables on regional participation rates and regional unemployment rates in the EU? Is the effect of explanatory variables on regional labour market outcomes the same for all countries or does it differ across countries? As wagesetting is highly centralised in Continental Europe, what is the effect of national institutions on regional labour markets under centralised wage bargaining? One of the conclusions is that a uniform policy across nations is unlikely to be effective, since the effects of regional variables on regional participation and unemployment vary markedly across countries.

Integrated Analysis of Regional and National Unemployment Differentials in the European Union

Regional Studies. This study investigates the causes of variation in regional unemployment rates from a cross-country perspective. In the proposed, stylized theoretical framework, both regional- and national-level variables serve as explanatory variables. An econometric model of random and fixed coefficients of regional and national variables acknowledges that observations may be correlated in space and time and that some explanatory variables are not strictly exogenous. Using annual data pertaining to 142 regions across ten European Union countries during 1983-1997, it was found that regional and national variables are almost equally important and that unemployment cannot be addressed with a common policy