Explaining regional unemployment differences in Germany: A spatial panel data analysis

Franziska Lottmann

No 2012-026, SFB 649 Discussion Papers from Humboldt University Berlin, Collaborative Research Center 649: Economic Risk

Abstract: This paper analyzes determinants for regional differences in German unemployment rates. We specify a spatial panel model to avoid biased and inefficient estimates due to spatial dependence. Additionally, we control for temporal dynamics in the data. Our study covers the whole of Germany as well as East andWest Germany separately. We exploit district-level data on 24 possible explanatory variables for the period from 1999 until 2007. Our results suggest that the spatial dynamic panel model is the best model for this analysis. Furthermore, we find that German regional unemployment is of disequilibrium nature, which justifies political interventions.

Keywords: regional unemployment; spatial dependence; spatial panel models; Germany (search for similar items in EconPapers)
JEL-codes: C23 R12 R23 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb649:sfb649dp2012-026

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