The migration response to local labour market shocks: Evidence from EU regions during the global economic crisis

The global economic crisis has strongly affected Europe's economic geography. This study investigates the role of local labour market disparities in determining regional net in‐migration rates. While only a weak link is detected in the precrisis period, the local labour market context of migration grows significantly stronger during the crisis. Decompositions of the estimation results show that changes in migration rates are firstly a result of widened disparities across European regions throughout the crisis. However, also behavioural adjustment processes occur, e.g. an orientation of migrants towards urban areas and away from regions with persistently high long‐run unemployment rates.     

Does migration arbitrage regional labor market differentials?

"This paper examines the determinants of regional migration [in the United States] in the 1980s using a place-to-place migration model in which migration flows depend upon the relative economic opportunities in the origin and destination regions. Using the results of the model, we then examine the potential role for migration in diffusing the economic pressures associated with disparate regional economic growth. Although the results reinforce the notion that divergent regional growth was an impetus to migration in the 1980s, estimates of the employment status of movers suggest that the true effects of migration on unemployment differentials may be quite small."     

The Pursuance of Better Quality of life: In the Long Run, Better Quality of Social Life Is the Most Important Factor in Migration

A bstract . A model is developed to explore the relationships between interregional migration and regional variations of quality of life. The model incorporates the impact of the interregional variations of the various aspects of quality of life including economic, political, environmental, social, health and education. The long-run and short-run migration data for 65 major U.S. standard metropolitan statistical areas are used to test the model. The results suggest that unlike the conventional conclusions, economic factors are not so important in motivating interregional migration. Rather, it is shown that in the long-run the pursuance of better quality ot social life turns out to be the most important factor. In the short-run, the results suggest that the pursuance of better environmental quality is the dominant factor in explaining the interregional migration.     

MIND THE GAP: UNEMPLOYMENT IN THE NEW EU REGIONS

Abstract.  The paper surveys the theoretical and empirical literature on regional unemployment during transition in Central and Eastern Europe. The focus is on optimal speed of transition (OST) models and on comparison of them with the neo-classical tradition. In the typical neo-classical models, spatial differences essentially arise as a consequence of supply side constraints and institutional rigidities. Slow-growth, high-unemployment regions are those with backward economic structures and constraints on factors mobility contribute to making differences persistent. However, such explanations leave the question unanswered of how unemployment differences arise in the first place. Economic transition provides an excellent testing ground to answer this question. Pre-figuring an empirical law, the OST literature finds that the high degree of labour turnover of high unemployment regions is associated with a high rate of industrial restructuring and, consequently, that low unemployment may be achieved by implementing transition more gradually. Moreover, international trade, foreign direct investment and various agglomeration factors help explain the success of capital cities compared to peripheral towns and rural areas in achieving low unemployment. The evidence of the empirical literature on supply side factors suggests that wage flexibility in Central and Eastern Europe is not lower than in other EU countries, while labour mobility seems to reinforce rather than change the spatial pattern of unemployment.     

Youth labour market performances in the Russian and Italian regions

The focus of this paper is on youth unemployment in Italy and Russia: in both countries, youth unemployment rates (YURs) are higher than adult (or total) ones. Despite these general trends, there are significant regional differences in YURs and above-average YUR regions tend to cluster close to each other. Moreover, a distinction between “North” and “South” regions seems appropriate for both countries. The purpose of this study is to identify key determinants of YURs in the Russian and Italian regions, for the period 2000–2009. We also search for the existence of distance spatial effects. In particular, we estimate a modified Arellano–Bond model for the regional YUR, including some explanatory and control variables (e.g. regional GDP in PPP, regional population density, regional total unemployment rate), together with year dummies and North/South dummies. The use of distance matrixes enables important analysis to be conducted on the role played by spatial effects, which turn out to be significant. Also the negative impact of the 2008–2009 crisis is statistically confirmed (at least in the case of Italy). The relevant policy implications are highlighted in the conclusions.     

The Influence of Geography on the Spatial Agglomeration of Production in the European Union

Abstract

Small regions and towns often experience problems such as high out-migration and unemployment. In these situations there is an urgent need to do something positive. Infrastructure development projects, partially financed by the national government, are a popular suggestion. We ponder the relevance of these actions in this paper in a context of project evaluation. We introduce computable general equilibrium (CGE) modelling as a complement of the other quantitative evaluation techniques. We will use the town of Lapua in South Ostrobothnia, Finland, which is planning to implement two large-scale infrastructure projects, as an example. Our simulation tool is the Finnish multi-sector and interregional CGE RegFin model. We consider the regional short-run effects of the construction phase, the long-run effects of new business activity and the so-called secondary effects based on the commuting and trade patterns of the households.     

A keynesian macro-econometric model of the UK: 1955–1984

In this paper we present a small Keynesian macro-economic model in which wage-price determination is linked to the working of goods and money markets. By explicitly treating the Keynes effect we derive a general expression for the employment-money supply elasticity, and draw the IS-LM loci in the employment-interest rate space Our empirical specification allows for short-run disequilibrium dynamic adjustments around the static long-run relations predicted by the theoretical model. By careful use of our specification search strategy we obtain a statistically sound econometric model, which exhibits sensible long-run properties. A remarkable finding implied by our estimates is that equilibrium unemployment is negatively affected by both money supply and incomes policy.     

The impact of productivity adjusted deviations from PPP on the U.S. inbound FDI: Evidence from Japan, U.K. and Germany

In this paper, we investigate the degree to which productivity adjusted deviations from PPP influence the U.S. inbound FDI. Our results show a significant negative relationship between productivity adjusted misalignments and the U.S. inbound FDI from Germany and the United Kingdom in the short-run, and a positive relationship in the long-run. Hence, indicating that a positive misalignment—undervalued U.S. dollar—leads to a decrease in the U.S. inbound FDI in the short-run and to an increase in the long-run. No significant evidence is found for Japan. Interestingly, unadjusted real exchange rate changes show no statistically significant relationship with respect to the U.S. inbound FDI. The authors thank the reviewers for their insightful comments.     

Local Economic Structure and Growth

Abstract

This paper tests how the local economic structure—measured by local sector specialization, competition and diversity—affects growth of manufacturing sectors. Most of the empirical literature assumes that in the long run more productive regions will attract more workers and use employment growth as a measure of local productivity growth. However, this approach is based on strong assumptions, such as those of national labour markets and homogeneous labour. This paper shows that if we relax these assumptions, regional adjusted wage growth is a better measure of productivity growth than employment growth. This measure is used in order to study regional growth in Portuguese regions between 1985 and 1994. Evidence is found of MAR externalities in some sectors and no evidence of Jacobs or Porter externalities in most of the sectors. These results are at odds with the findings for employment-based regressions, which show that regional concentration and the region's size have a negative effect in most of the sectors. It is also shown that simply using regional wage growth would overstate the effect of regional concentration and competition on long-run growth.     

Spread determinants and the day-of-the-week effect

In this paper, we examine the determinants of the dollar bid–ask spread for each day of the week over the period 1998–2008. Using a panel cointegration approach, we estimate the determinants of the spread in both the short-run and long-run. Our main findings suggest that: (1) there are day-of-the-week effects for certain groups of firms; (2) the panel error correction model also reveals day-of-the-week effects, and the speed of adjustment to equilibrium following a shock is faster on Fridays; and (3) the effects of volume and volatility on the spread are mixed, with only some sectors experiencing the day-of-the-week effect.     

Unemployment in Greece: Evidence from Greek regions using panel unit root tests

The purpose of the paper is to examine the nature of Greek regional unemployment. The paper contributes to the literature assessing the stochastic properties of Greek unemployment rate in the context of the Greek regions by relying on various univariate and panel unit root tests. In particular, recently developed and more powerful panel unit-root tests that control for structural breaks, heterogeneity and cross-sectional dependence in the panel are employed. The results show that in all cases, after taking into account the fact that regional unemployment rates in Greece are subject to a structural break, the null hypothesis of a unit root is not rejected, indicating that the Greek regional unemployment series are non-stationary with the presence of a structural break.     

Migration within England and Wales and the Housing Market

Economic conditions exert a strong influence on regional migration. On the one hand, strong labour market conditions, as exemplified by low unemployment rates and high earnings, draw migrants into regions. On the other hand, strong housing market conditions can prevent movement since commuting may often be an alternative to migration. This can be thought of as giving rise to a migration equilibrium where high house prices choke off migration caused by strong labour market conditions. Expected capital gains in housing, however, can offset high levels of house prices, an effect ignored in previous literature. Migration can also be influenced more directly by the availability of housing relative to population without this being mediated through prices. This paper, by Gavin Cameron, John Muellbauer and Anthony Murphy, presents evidence on inter‐regional net and gross migration between the regions of England and Wales that is broadly in accord with these expectations.     

DEA evaluations of long- and short-run efficiencies of digital vs. physical product “dot com” companies

This paper applies Data Envelopment Analysis to determine relative efficiencies between internet dot com companies that produce only physical products and those that produce only digital products. To allow for the fact that the latter are relatively inexperienced, a distinction is made between long- and short-run efficiencies and inefficiencies, with a finding of no statistically significant difference in the short run but digital product companies are significantly more efficient in the long run. A new way of distinguishing between long- and short-run performances is utilized that avoids the need for identifying the time periods associated with long-run vs. short-run efficiencies and inefficiencies. In place of “time,” this paper utilizes differences in the “properties” that economic theory associates with long- and short-run performances.     

Disparities in Prosperity

Regional differences in prosperity and productivity have recently been rising up the government's priority list as matters requiring serious attention. Wide existing disparities partly explain the government's desire to introduce regional assemblies and to propose that most of these should move from a consultative to an elected basis. Of course, the introduction of devolution to Scotland, Wales and Northern Ireland in 1998 has increased the desire within English regions to reproduce the perceived advantages of the devolved regions. In this article, Graham Gudgin ¹ looks at the extent and causes of differences in regional prosperity.     

INFRASTRUCTURE AND REGIONAL DEVELOPMENT IN PAKISTAN

Despite considerable concern by the government, deep regional disparities remain a persistent and troubling feature of Pakistan's economy. Although stark inter-provincial differences have received the most attention, both policy-makers and research scholars also need to address profound intra-provincial inequalities. Using factor analysis, this paper examines the relationship between investments in "hard" infrastructural development and inter-provincial and intra-provincial disparities in Pakistan. Overall, the paper argues that a very close association exists in Pakistan between regional infrastructure endowment and broad levels of socio-economic development. Specifically, data indicate the striking importance of transport within and across regions. The analysis investigates the importance of differing types of transport infrastructure for regional development. The paper concludes with policy recommendations concerning levels, types and mix of hard infrastructural investments that might provide policy-makers with the best opportunity for alleviating income disparities.     

What are the main explanations of occupational diseases and accidents at work in the agricultural sector? A panel analysis for Italian regional data

The aim of this paper is to investigate the causes of occupational diseases and accidents at work (ODA) in the Italian agricultural sector. To this end, we proceed with a two-stage analysis of Italian regional data for the period 1976–2004. The first phase of the analysis shows that in the Italian agricultural sector productivity Granger-causes ODA, and not vice versa. The results of the econometric estimates in the second stage of the analysis show that an increase in “productivity pressure” (associated with an increase in production rhythms) will produce, in the long run, an increase in accidents on less serious ODA (or temporary ODA); the same effect will not be observed on the more serious ODA (or permanent ODA). We verify how pro work legislation reduces ODA and how this effect is strengthened in the long-run. In addition, we observe that in the long-run the increase in the “pressure on workers” (associated with a high unemployment rate and a high probability of being fired) is the main cause of the increase in less and more serious ODA.     

Regional unemployment disparities in China

China has larger regional unemployment disparities than any other economy of comparable size. The persistence of the unemployment disparity in China has prevented the aggregate unemployment rate from decreasing even when the country’s GDP was growing at 10 percent per year. Unemployment rates rose and unemployment disparities widened in other transition economies too, but what made China’s disparities wider than those in other transition economies is the existence of a large subsistence sector, where unemployment exists only in a disguised form. This study explains the wide unemployment disparity in China with the geographically uneven distribution of the three sectors: the state sector, which suffers from a steep rise of unemployment during transition; the capitalist sector, which absorbs labor from the subsistence sector and grows rapidly; and the subsistence sector, which supplies its redundant labor to the capitalist sector. The study also presents a case study of Fuxin City, which has experienced an extremely high unemployment rate due to the reform of its main industry. Fuxin’s case is presented as a microcosm of the problems that give rise to unemployment disparities, such as massive layoffs in the state sector, lack of labor mobility in the unemployment-stricken regions, and inadequate development of the capitalist sector.     

Economic and spatial determinants of interregional migration in Kazakhstan

In this paper we analyze economic and spatial determinants of interregional migration in Kazakhstan using quarterly panel data on region to region migration in 2008–2010. The main contribution of the paper relates to the ethnic divide in Kazakhstan, which is the home of a big ethnic Russian community, adding to the scarce literature on ethnic differences in migration patterns. Against this background we investigate whether the determinants of interregional mobility depend on ethnicity. In line with traditional economic theory we find that migration is determined by economic factors, first of all wage. As predicted by gravity arguments, mobility is larger between more populated regions and distance has a strong negative impact on migration, indicating high migration-related costs. Most likely caused by stronger family ties and kinship bonds, the deterring effect of distance is higher for ethnic Kazakhs.     

PERSONAL AND REGIONAL DETERMINANTS OF OUT‐MIGRATION FROM METROPOLITAN AREAS IN JAPAN

In this study, we focus on migration from metropolitan to outside areas in Japan, and quantitatively examine the personal and regional determinants of this process. At the regional level, our results show that the determinants of migration differ depending upon whether migration occurs from smaller to larger cities or vice versa. In the case of migration from larger to smaller cities, the residential environment beyond the metropolitan area is more important than employment opportunities. At the personal level, we analyzed the differences among the determinants of migration, looking at migrants according to age categories and based on their motivations for migrating. The main factors encouraging migration comprised opportunities for employment, education, and marriage.     

Nonlinear minimization estimators in the presence of cointegrating relations

In this paper, we consider estimation of a long-run and a short-run parameter jointly in the presence of nonlinearities. The theory developed establishes limit behavior of minimization estimators of the long- and short-run parameters jointly. Typically, if the long-run parameter that is present in a cointegrating relationship is estimated, its estimator will be superconsistent. Therefore, we may conjecture that the joint minimization estimation of both parameters jointly will result in the same limit distribution for the short-run parameter as if the long-run parameter was known. However, we show that unless a regularity condition holds, this intuition is false in general. This regularity condition, that clearly holds in the standard linear case, is identical to the condition for validity of a two-step Granger–Engle type procedure. Also, it is shown that if the cointegrated variables are measured in deviation from their averages, the standard asymptotic normality result (that one would obtain if the long-run parameter was known) holds.