Macro-determinants of UK regional unemployment and the role of employment flexibility

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores the macroeconomic determinants of UK regional unemployment and their relation to the influences on unemployment exerted by the levels and types of employment flexibility in the country. Theoretically the paper draws on Keynesian and monetarist explanations of unemployment and elaborates on how the two main theoretical approaches perceive the role of price stability, accumulation, macroeconomic shocks and labour market rigidities for unemployment. Empirically, the analysis relies on a novel set of flexibility indicators and examines their impact on regional unemployment, unemployment persistence, and adjustment to economic shocks. The results provide useful insights into the explored relationships and highlight the areas and conditions under which employment flexibility helps achieve favourable employment outcomes. The implications of the findings are discussed in the concluding section.

Keywords: Employment flexibility; regional unemployment; persistence; NAIRU and Keynesian explanations of unemployment (search for similar items in EconPapers)
JEL-codes: R38 J64 R11 E24 E12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-mac
Date: 2006-03
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