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.     

Accounting for migration in regional occupational employment projections

Occupational employment projections are one of the primary products produced by state labor market information agencies to assist with state and regional job training and worker assistance programs. In theory, the information from occupational employment forecasts should improve both interregional and intertemporal labor market efficiency through better matching between training efforts and job openings. Until recently, the projections methodology was predominantly a demand-requirements approach that failed to incorporate important labor supply effects and interstate/interregional dependencies. Recent research has focused on improving the labor supply specification. This paper reports on one such effort to evaluate the importance of interstate occupational migration and to develop methods to incorporate migration into the existing projections methodology. Initial results indicate that the total number of estimated job openings by occupation have to be revised significantly upwards when migration is taken into account.     

A Simulation Model Of Economic Growth Dynamics

A small-area economic base study is carried out through computer simulation using techniques of Industrial Dynamics. The model explicitly incorporates feedback between population and employment sectors to determine population, migration, job changes, labor force, participation rate change and industrial location and growth. The authors feel the technique holds promise for policy guidance especially in light of the speed and low cost of model construction and use. They suggest a number of specific questions which the model can help to answer.     

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.     

Urban externalities and city growth in Taiwan

The purpose of this paper is to investigate the influences of citywide and city-industry externalities on city growth. The effects of various externalities on city and industry growth for two different time periods in Taiwan are studied. The results indicate that employment growth at the city-industry level is: (1) negatively related to the initial city-industry employment; (2) positively related to the level of competition in the initial year; and (3) positively related to the degree of diversity in the initial year. The extent of the impact of the diversity externality is relatively large compared with the other effects. In addition, wage growth at the city-industry level is found to be: (1) negatively related to the initial city-industry wage rate; and (2) positively related to the degree of diversity in the initial year. Overall, we find that specialization hurts, competition helps, and city diversity helps both employment growth and wage growth. Our results favor Jacobs's theory, which would suggest that cross-industry externalities and local competition are more important for industry growth than are intra-industry spillovers. Received: February 2001/Accepted: April 2001     

The growth impact of the metropolitan statistical area designation

The federal Office of Management and Budget’s (OMB) periodic releases of updated metropolitan statistical area (MSA) definitions garner significant attention from local economic development professionals and policymakers. This paper tests the hypothesis that the MSA designation influences local growth, using OMB designations released since 1980 and data on per capita personal income, population, and employment. We find little evidence that the MSA designation influences long-term employment or per capita income growth. However, we do find evidence suggestive of a short-run impact on employment growth and more significant impacts on population growth. Hammond would like to thank Justin Ross and Anthony Gregory for excellent research assistance on this paper.     

Growth and change in U.S. micropolitan areas

The U.S. Census Bureau has now recognized micropolitan places, which are sometimes called emerging metropolitan areas or mini-metros. After the 1990 census, a total of 581 different non-metropolitan counties, forming 496 consolidated micropolitan areas, were assigned to this new settlement category. The first half of the paper analyzes the evolving geographic distribution and the shifting employment attributes (emphasizing job specialization) of these places during 1980–2000. Changes in the U.S. micropolitan landscape, reflecting the impressive growth of these places during the late 20th century, mirror other well-known national demographic and economic trends. The second half of the paper analyzes simultaneous population and employment change in micropolitan counties, using a series of partial adjustment models that control for various demographic, economic, and geographic factors. Evidently (initial and adjusted) population levels have induced both employment and population change in these places, but employment levels have failed to have the same impact.

Modeling regional endogenous growth: an application to the non-metropolitan regions of Australia

An exploratory modeling approach to investigate spatial variation in the levels of regional endogenous employment growth and decline over the decade 1991–2001 is developed and applied to an analysis of the non–metropolitan regions (Local Government Areas) in each of the five mainland States of Australia. For the dependent variable, the summation of the regional shift component for change in total employment in major industry sectors¹ over the decade 1991–2001, standardized by the size of the labor force at the beginning of the period, is used as a proxy measure of regional endogenous growth. A general OLS model incorporating a set of 27 independent variables (measuring aspects of industry structure, unemployment, occupational structure, population size and growth, human capital, income distribution, and proximity to the coast and the state metropolitan region) is run, followed by a backward iterative statistical procedure to reduce the complexity of the general model by eliminating statistically insignificant variables to arrive at a specific model for each State. ¹ 17 of the first digit industry sector classifications under ANZSIC93 were used.     

Job accessibility and ethnic minority employment in urban and rural areas in Taiwan

This study is an empirical exploration of the effects of job accessibility on ethnic minority employment in urban and rural areas. The urban sample is composed of Taiwanese aborigines who migrated to cities from their native locales while the rural sample is composed of aborigines who reside in aboriginal villages. Sample data are collected through questionnaire surveys conducted in 2009 and 2012. Results indicate that rural aborigines have a lower unemployment rate but less stable employment than urban aborigines. Employed rural aborigines receive slightly higher salaries and incur higher commuting cost than employed urban aborigines. However, regardless of where the aborigines live (i.e., urban or rural areas), increased job accessibility is not related to employment and employment stability, but significantly increases aboriginal salary. Moreover, improved job accessibility increases the commuting time of rural aborigines, but its effects on the commuting time of urban aborigines depend on the travel mode. Empirical evidence implies that migrating to cities can be both beneficial and fruitless for aboriginal employment, and that the effects of accessibility on the employment of Taiwanese aborigines in urban and rural areas are both similar to and different from those of non‐aborigines documented in previous studies.     

Restricting access in a job chains model of local employment creation

The job chains model of local labor market change is a demand-driven analytic device for estimating the effects of new job creation. This paper explores the effects of restricting supply, i.e., limiting job access, on the model’s primary outcomes: vacancy chain multipliers, welfare effects, and distributional impacts. Major sources of labor supply are the local unemployed, out of the labor force and in-migrants. Three simulations are reported relating to (1) restricting new jobs to current local residents (i.e., no in-migrants), (2) restricting new jobs to current residents in the first round of hiring only, and (3) restricting hiring to local unemployed/out of labor force on the first round alone. The results are compared to the basic model that assumes no supply-side restrictions. In terms of chain length, welfare effects, distributional impacts, and policy palatability, first-round restrictions on in-migrants would seem to be the most plausible option. However, as an economic development strategy, well-targeted demand-side initiatives would still seem to be preferable.

Sources of regional variation in youth employment

This paper uses state data for the late 1970's in a regression model to assess the relative importance of several hypotheses that have been advanced to explain the significant relative deterioration in youth employment opportunities. The paper also attempts to evaluate the nature and importance of regional differences with respect to the variables that are associated with youth employment opportunities. In particular the paper focuses on the effects of minimum wages and efforts to alter wages by unions, the expanded youth population and the changing labor force participation of females, differences in labor market tightness, expenditures on job training, schooling decisions on the part of young people and the general influence of poverty. Drawing on the empirical evidence, the authors conclude that a policy of regional minimum wages might result in a ten to twenty percent expansion in youth employment and achieving full employment for adult males might have an approximately equal effect.     

Urban growth effects on rural population, export and service employment: evidence from eastern France

This paper examines how the spatial pattern of urban growth in functional economic regions influences the interplay of rural export employment, rural services employment, and population change in rural areas. Using an extension of the Boarnet’s model (Papers in Regional Science 73:135–153, 1994), we find that urban spread effects to rural areas in France are more likely than urban backwash effects, and that spatial urban (both dynamic and static) externalities affect rural population and employment growth. In the functional economic regions where the urban core is declining and the urban fringe is expanding, urban population growth involves an increase in rural export employment, and larger change in service employment favors rural population growth. However, urban export job growth reduces the growth in rural service jobs and expanding urban service jobs reduce rural export jobs, suggesting that expanding urban employment opportunities draws employees away from proximate rural communities. Conversely, where both urban core and fringe are growing, we observe an urban spread effect from the urban export sector to rural services—an export base multiplier effect with a spatial dimension—and from urban population growth to rural service employment.

What explains unemployment in US–Mexican border cities?

The unemployment rate of US–Mexico border cities has stood remarkably higher than the US average. Using annual data from 1990 to 2005, we contrast large border MSAs (Brownsville, McAllen, Laredo, and El Paso in Texas and El Centro in California) to a panel of MSAs in the same states (Austin, Dallas, Houston, San Antonio, Los Angeles and San Francisco). Focusing on the industry composition of employment and population growth, we report several panel data results confirmed by error correction adjustment. First, the national unemployment rate does not help explain the local border cities unemployment but does so for the panel of large MSAs. Second, the relative employment indices have statistically significant effects only for the border panel: increases in employment concentration within an industry lead to higher local border unemployment. Third, higher population density lowers unemployment for border cities. Two anonymous referees of this journal provided useful comments on a first draft. The usual disclaimer applies.     

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     

Social accounting and regional economic planning: an integrated model for policy analysis and optimisation

This paper combines a Social Accounting Matrix (SAM) with a Linear Programming (LP) model for impact analysis and the allocation of resources among alternative sectors. The model is applied to the Golestan Province of Iran. A SAM is used to analyse the impact of economic policy on Gross Regional Product (GRP), job creation for different educational groups among the labour force, mean personal income and income inequality. The mean GRP of the region is formulated as an objective function, with job creation, income inequality, and supply and demand limitations of sectors formulated as constraints of the model. By combining an LP model with a SAM it is possible to determine the activity level of sectors to meet the maximum level of GRP for a region with respect to related goals and constraints. The linking of a SAM with an LP model allows the positive points of each model to be combined in a new model with greater capabilities. The results of implementation of the model can be used for resource allocation and policy-making purposes.     

Agglomeration,job flows and unemployment

This paper examines how job flows and unemployment vary across regions in the context of a New Economic Geography (NEG) model with equilibrium employment. The in-migration that results from agglomeration economies leads to higher rates of both job creation and job destruction. In-migration also leads to lower rates of unemployment suggesting that the regional effects of job creation on unemployment dominate those of job destruction, a result consistent with empirical evidence. Since higher rates of job destruction correspond to higher productivity the results demonstrate that a NEG model can provide a microfoundation for labor market pooling.     

The regional labor market adjustment process: Determinants of changes in rates of labor force participation,unemployment, and migration

This paper employs a simultaneous-equations model to examine the regional labor market adjustment process for a sample of United States counties over the 1960–1970 period. The interaction between employment change and migration is well known, but that between employment change and labor force participation has been largely neglected. Labor force participation response, especially among women, is shown to be an important endogenous element in the labor market adjustment process. Important asymmetries are also evident between growing and declining regions, and these asymmetries suggest that the well-established link between employment and migration may have more force in growing than in declining areas.This study was supported by a grant from the Economic Development Administration, U.S. Department of Commerce.     

Estimating population change with a two-category shift-share model

Shift-share analysis is an accounting procedure that identifies three separate effects for regional employment change. But the analysis is ordinarily restricted to only one category: usually, industry employment. This paper presents a new shift-share model that simultaneously addresses both occupation employment and industry employment. Community-level occupation-in-industry employment effects (both mix and competitive) occurring in the 1980s are then used to estimate population change in the 1990s. Separate estimates are given for two data sets comprised of different-sized non-metropolitan U.S. communities – small towns and micropolitan centers. This expanded two-category model is shown to generate estimates that are clearly superior to those of the traditional one-category model.The first version of this paper was presented at the annual meeting of the Association of Pacific Coast Geographers in September, 2001. The senior author has benefited from various conversations with Kingsley Haynes regarding shift-share analysis. The authors also thank three referees and the editor for their comments on an earlier version of the paper.     

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.