Article
Regional unemployment and productivity in Europe
Papers in Regional Science
(2008)
Abstract
We analyse the relationship between regional unemployment and labour productivity in Europe, basing our empirical analysis on the predictions of a Neary-type General Oligopolistic Equilibrium trade model with efficiency-wages. Using semiparametric and dynamic panel data estimators and controlling for other factors, we give evidence of a nonlinear relationship between productivity and regional unemployment in Europe: with a level of productivity smaller than a certain threshold, this relationship is negative, while no relation occurs in the case of higher productivity regions. This evidence proves an important role of a wage-floor (induced by efficiency wages and exacerbated by institutional factors) under which the productivity gap cannot be compensated by a wage gap.
Keywords
- Productivity,
- Regional Unemployment,
- Oligopoly,
- Semiparametrics,
- Dynamic Panel
Disciplines
Publication Date
Summer June, 2008
Citation Information
Luca De Benedictis and Roberto Basile. "Regional unemployment and productivity in Europe" Papers in Regional Science Vol. 87 Iss. 2 (2008) Available at: http://works.bepress.com/luca_de_benedictis/10/