Working Paper: CEPR ID: DP2255
Authors: Diego Puga; Henry G. Overman
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.
Keywords: unemployment; European regions; distribution; dynamics
JEL Codes: E24; F15; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| changes in regional employment (R11) | unemployment rates (J64) |
| regional employment shifts (R23) | unemployment rates (J64) |
| neighboring regions (R11) | unemployment outcomes (J65) |
| foreign neighbors (F55) | unemployment outcomes (J65) |
| domestic neighbors (R20) | unemployment outcomes (J65) |
| integration of EU member states (F55) | spatial concentrations of unemployment (R23) |