Regional labor markets in Finland: Adjustment to total versus region-specific shocks

This article analyses regional labor market adjustment in the Finnish provinces during 1976–2000. We investigate the inter-relations of employment, unemployment, labor force participation, and migration to see how a change in region-specific and total labor demand is adjusted. The analysis reveals that region-specific labor demand shocks adjust mainly via participation, whereas total shocks are adjusted by unemployment. The region-specific component of labor demand shock has shorter-lived effects on unemployment and participation, but its effect on employment is permanent. Conversely, total shocks leave no permanent effect. Migration is more important in the region-specific case where, after a few years, it acquires a large role in the adjustment process.     

Part-time workers and economic expansion: comparing the 1980s and 1990s with U.S. state data

Economists know little about how the role of part-time workers affect regional labor market dynamics during economic expansion. This study examines this issue using U.S. state data from the 1980s and 1990s. Compared to the 1980s, the labor market during the late 1990s is associated with widespread labor shortages, making this an excellent comparison of how part-time employment responds to economic growth. One key finding is that part-time employment was less responsive to job growth during the 1990s than the 1980s, especially for women. Several explanations are put forth, including firm responses to labor shortages, employer perceptions of inferior part-time worker characteristics and welfare reform. Received: 30 March 2001/Accepted: 20 November 2001 RID="*" ID="*" The author thanks ?rn Bodvarsson, Jamie Partridge and session participants at the 2001 Mid Continent Regional Science Association Meeting for their useful comments and suggestions.     

The effect of unemployment, aggregate wages, and spatial contiguity on local wages: An investigation with German district level data

Despite spatial rigidity of collectively negotiated wages the local unemployment rate is found to have a significant negative impact on wages. This impact is shown to be consistent with both the wage-curve hypothesis and modern Phillips-curve modelling. Spatial contiguity effects are found in wages and unemployment and their neglect leads to an underestimation of the effect of local unemployment. Yet, the impact of local unemployment on wages turns out to be quite low as compared to studies for other countries. Some support for the hypothesis that negotiated wages suppress spatial wage flexibility comes from the finding that the impact of local unemployment on local wages decreases with its extent. Received: 13 December 1996 / Accepted: 8 June 1998     

Explaining the pattern of regional unemployment: The case of the Midi-Pyrénées region

Unemployment rates vary widely at the sub-regional level. We seek to explain why such variation occurs, using data for 174 districts in the Midi-Pyrénées region of France for 1990–1991. A set of explanatory variables is derived from theory and the voluminous literature. The best model includes a correction for spatially autocorrelated errors. Unemployment rates are higher in urban areas and, where per capita income is higher, are consistent with the view that unemployment differences largely reflect variations in “amenities.” Along with a lack of evidence of housing market rigidities, these suggest that subregional variations in unemployment are not mainly the result of labor market disequilibrium. Received: 9 July 1999 / Accepted: 30 October 2001     

Voting with your feet in the United Kingdom: Using cross-migration rates to estimate relative living standards

This article reexamines and extends the literature on the use of migration rates to estimate compensating differentials as measures of regional quality of life. I estimate an interregional migration regression for the UK and use the results to measure regional quality of life and standard of living. The results suggest a North-South divide within England, and that Scotland and Wales have relatively high levels of both. The results also lead to a rejection of regional standard-of-living e quivalence (long-run regional equilibrium) in the UK. Received: August 1998 / Accepted: January 2000     

Urban rent and urban dynamics: The determinants of urban development in Italy

Many empirical analyses have proved the existence of an optimal city size through the measurement of economies or diseconomies of scale, generally applied either to the costs of urban services or to elegant econometric estimates of urban and sectoral production functions. But, unfortunately these studies have never produced a common result, and have often been subject to criticism for their restrictive hypotheses. The aim of the present paper is twofold. First of all, urban dynamics in Italy is described through an indicator of urban costs and advantages, i.e. urban rent. House prices are in fact a good indicator of the attraction of an urban area, as they are synthetic and avoid a time lag between the occurrence of phenomena such as demographic change, and the availability of data to capture these phenomena. This study is based on the idea that the difference in house prices between large and small cities is a measure of their relative attraction (and thus their relative location advantage). The second aim is to highlight the determinants of urban dynamics, and especially to understand whether urban development patterns are similar in cities of different size. For this second issue, the paper enters the debate on the existence of an optimal city size for all cities and draws attention to other possible determinanats of urban development. Received: May 2000/Accepted: January 2002     

Time distances and labor market integration

This article investigates how time distances within and between municipalities determine the spatial extent of local and regional labor markets. As time distances change, the extent of the labor market will also change. Diminishing time distances will bring about increases in labor market size by integrating formerly spatially separate markets. We analyze such processes using accessibility measures derived from a random choice preference function approach. Accessibility is measured in terms of number of jobs, labor supply and supply of service functions. The aim of the work is to illustrate the usefulness of the purpose-specific accessibility measure we introduce.     

The effect of industrial diversity on state unemployment rate and per capita income

This paper examines the effect of industrial diversification on state unemployment and per capita income. Diversification may provide a form of employment insurance to states during cyclic downturns. Thus well diversified states should experience lower unemployment. To the extent that specialization confers economic benefit, however, more concentrated states should have higher per capita personal income. We use two sets of panel data for seventeen states spanning a thirty-eight year period to test these hypotheses. When state heterogeneity is controlled for properly, our results show that a strong link exists between industrial diversity and reduced unemployment. The evidence that per capita personal income is associated with industrial concentration is much weaker. Received: June 2000/Accepted: April 2001     

Job and residential search behaviour of two-earner households

Even though a large share of the workforce belongs to two-earner households, job search models invariably ignore the interaction between the wage earners of the same household. In this article, job and residential search behaviour of two-earner households are simultaneously analysed. The main finding of the theoretical model is that two-earner households search less intensively in the housing market, and more intensively in the labour market, if the distance between the workplaces of the two wage earners is longer. In the empirical part the latter finding has been analysed based upon a data set for Dutch two-earner households. Received: 12 May 1998 / Accepted: 10 October 1999     

Is the labor market tighter outside the ghetto?

The purposes of this article are twofold. First, a critical review is provided of the traditional approach to empirically investigating the effects of labor market spatial mismatch on minority workers. Second, in lieu of analyzing the effects of mismatch as has been done in previous studies, the logically prior issue of whether spatial mismatch exists is investigated using establishment data from four large metropolitan areas. Results suggest that mean job vacancy rates and/or starting wages are lower in ghetto areas, suggesting that the labor market is tighter outside these areas. The evidence therefore supports the existence of spatial mismatch. Received 5 January 1998 / Accepted 30 June 1998     

Firm relocation decisions in The Netherlands: An ordered logit approach

This article explores the determinants of firm migration in The Netherlands. First, based on the existing literature a theoretical framework is developed. Second, based on aggregate data firm relocation processes in The Netherlands are discussed in terms of numbers, sectoral composition, origins and destinations (regions), distance moved and employments effects. In the third part a formal model will be tested using individual data of firms. The relocation decisions of individual firms will be related to firm and location characteristics by means of an ordered logit model. The results indicate that the decision to relocate is mainly determined by firm internal factors and to a lesser extent by site related factors. Received 1 July 1999 / Accepted 28 November 1999     

Regional differences in personal saving rates in Spain

The aim of this article is to analyze, from an aggregate perspective, the differences in personal saving rates among the Spanish regions at the NUTS II level from 1986 to 1994. In accordance with the postulates of the life cycle hypothesis, we present the main economic determinants for personal saving rates obtained from an aggregate personal saving model. Correcting for temporal and spatial dependence in the empirical model, the analysis suggests the existence of a significant and negative relationship between aggregate personal saving rates and wealth, access to credit and direct tax burdens. Likewise, a nearly significant positive relationship between personal saving rates and per capita gross disposable personal income has been detected. Received: 29 January 1999 / Accepted: 31 July 2000     

Changing the economic landscape: The phenomenon of regional inversion in the US manufacturing sector

Regional inversion is the name given to the phenomenon whereby the traditional industrial areas of certain countries lose their weight in favor of what were formerly peripheral zones. Against this background our first objective is to offer a formal and rigorous definition of the concept of regional inversion from an econometric standpoint. To that end we relate such a process with the long-run concepts of convergence and catching-up. Secondly, we test this definition through the use of unit root statistics and apply these to demonstrate the presence of this phenomenon in some of the US two-digit SIC industries. Received: 4 December 2000 / Accepted: 20 August 2001 RID="*" ID="*" The authors would like to express their thanks to three anonymous referees for their helpful comments and observations on an earlier version of this article. Financial support from grants PB97-1028 and PB98-1614 of DGES is gratefully acknowledged.     

Regional inequalities in Greece

This article examines regional inequalities in Greece, on the basis of -convergence and -convergence analysis and shows that they were reduced in the 1970s and the 1980s. Regression analysis indicates that regional inequalities have a pro-cyclical character, increasing in periods of economic expansion and decreasing in periods of economic recession. It also indicates that the structure of local industry, the process of EU integration, the quality of human capital and the existence of resources suitable for the development of tourism are among the factors affecting regional growth. Received 30 March 1998 / Accepted 29 July 1999     

Independent and linked migration: Individual return of employment opportunity and household return of poverty status to African American interstate migration

The thrust of this study is to describe and contrast the determinants and outcomes of African-American interstate migration. We examine two types of migration outcomes – individual return to employment probability and household level return to poverty status. We investigate these motivations and outcomes based on a new typology of migration through the lens of household change that accompanies migration. We specify a pairwise two-stage probit model incorporating individual and state-level variables using Public Use Micro Sample data and various ecological data in the US. We show that independent migrants move to other states envisioning economic models of migration with migration as a derived response to opportunities, pressures, and constraints imposed by spatial inequalities in socioeconomic development. On the other hand, we demonstrate that linked migrants move to other states also for their economic need, but via kinship. In this case, the linked migrants' path does not follow the general pattern of economic circumstances. We show that household composition is an important factor that influences the destination choice for African Americans. While independent migrants are more concerned with diverse economic conditions at destinations, kinship, other ties and household structure at destinations are more significant factors for linked migrants. Received: June 2000/Accepted: June 2001     

The employment impact of demographic change: A regional analysis

The central concern of this article is with measurement of the economic impact of demographic change at a regional level. To facilitate this, a method is developed which involves the linking together of two hitherto separate analytical techniques: labour market accounts and extended input-output models. The application of the method is demonstrated by reference to three UK regions – West Midlands, Merseyside, and East Anglia – with contrasting demographic and economic histories over the time intervals 1971–1981 and 1981–1991. The employment impact of consumption derived from demographic change is measured in relation to individual elements of the labour market account and comparisons are made with the effects of economic change over the same time periods. Received: 27 February 1997 / Accepted: 5 March 1998     

Regional development of employment in eastern Germany: an analysis with an econometric analogue to shift-share techniques

We extend in this analysis an approach introduced by Patterson and suggested by M?ller and Tassinopoulos. Our approach uses a generalization of an econometric analogue of the common shift-share method, suggested here as a new “workhorse” for regional analyses. The results obtained with this shift-share-regression, and with very differentiated data from the employment statistics of eastern Germany, show that processes of deconcentration play a role in explaining regional disparities, since inverse localization and positive urbanization effects are visible. The relevant processes can be understood by implementing approaches of “new economic geography”, structural change and endogenous growth theory.     

Migration and regional labor market adjustment: Chile 1977–1982 and 1987–1992

The main objective of this paper is to evaluate the migration processes that have been occurring in Chile between 1977–1982 and 1987–1992, as a market mechanism to re-allocate labor among regions. Using traditional consumer theory, a model is developed for a migrant who is evaluating migration. Secondly, this model is estimated, with cross section aggregate data, for both periods using a logit formulation. The results indicate that there is a strong force in the Chilean regional labor market, which serves to concentrate the workforce around the largest populated region of the country. Finally, regional labor markets are simulated to show that migration forces are very weak to arbitrage regional wages and unemployment rate and specific policy is required to promote balanced development across Chilean regions. Received: January 1999/Accepted: August 2001     

Transition and unemployment in Central Europe: How redundant workers fare in regional labor markets

This study analyses whether redundant workers are stigmatized in regional labor markets, and if so, examines the severity of the effects. Stigmatization, possibly an outcome of statistical discrimination, is assumed to obtain whenever likelihoods of long-term unemployment are systematically elevated among otherwise equivalent individuals, due to involuntary job-loss. Such effects are considered during early transition in the Czech Republic, Slovak Republic and Poland, and within a modeling framework whereby current search duration (likelihood of long-term unemployment) and benefit receipt are jointly-determined. Although econometric estimates of long-term unemployment indicate significant and persistent stigmatization within the Slovak Republic and Poland; underlying causation apparently differs between countries. Received: 8 March, 2001 / Accepted: 19 December 2001 RID="*" ID"*"The authors wishes to thank the Luxembourg Employment Study (LES) for providing access to the five labor force surveys upon which this study is based, and is especially appreciative of assistance provided, on multiple occasions, by Elena Bardasi (former LES Coordinator). Appreciation is also extended to three anonymous referees for helpful comments and suggestions.