Unemployment and labor reallocation in Europe

Jan Hogrefe () and Andreas Sachs

No 14-083, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We ask whether sectoral shocks and the subsequent labor reallocation are responsible for unemployment within selected European economies. Our measure of sectoral labor reallocation is adjusted for aggregate influences and the remaining variation is linked to unemployment in country specific dynamic models. For Spain, the ADL-model estimation reveals a significant impact of sectoral reallocation on unemployment that goes beyond usual business cycle patterns. In Italy, there is weaker yet detectable evidence for this mechanism. In Ireland, Portugal and France, no significant influence of sector level shocks on unemployment is found. The results emphasize the potential structural supply side policies have for reducing unemployment in Spain.

Keywords: unemployment; sectoral shocks; labor reallocation; Europe (search for similar items in EconPapers)
JEL-codes: E24 J62 J64 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-eec, nep-lab and nep-mac
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:14083

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