Spatial dependence in local unemployment rates

Eleonora Patacchini and Yves Zenou

Journal of Economic Geography, 2007, vol. 7, issue 2, 169-191

Abstract: By explicitly considering the spatial dimension of local regional labor markets, we develop a simple dynamic model that explains the spatial correlation between unemployment rates. We then test this model by using UK local data. Our evidence shows a significant spatial dependence that has been growing over time and characterized by a low distance decay. Highly localized effects are explained by commuting flows. These results are consistent with the theoretical model. Copyright 2007, Oxford University Press.

Date: 2007
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