SPATIAL INTERACTIONS OF REGIONAL LABOUR MARKETS IN EUROPE

Laura Helena Kivi

No 116, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: This study investigates the spatial dependence of unemployment and employment rates in Europe relying on Eurostat NUTS2 level data for 306 European regions. Spatial dependence is explored using spatial error, spatial lag and a spatial autoregressive model with spatial autoregressive disturbances. The findings show that regional labour markets in Europe cluster in space – regions with high (low) (un)employment rate are surrounded by regions with high (low) (un)employment rate. The study provides evidence that significant spillovers across regional labour markets exist. The (un)employment rate in one region is directly affected by (un)employment rate changes in other regions, but also by unobserved shocks in other regions. It was found that the spatial effects are not determined by differences in the share of the population of youth, differences in industrial structure or difference in human capital. The results of the study confirm the importance of close coordination between regions while developing labour market and regional policy measures.

Keywords: regional labour markets; spatial econometrics; spatial dependence; clustering; Europe (search for similar items in EconPapers)
Pages: 38 pages
Date: 2019
New Economics Papers: this item is included in nep-eur, nep-geo and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:mtk:febawb:116

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