Regional unemployment dynamics in Indonesia: serial persistence, spatial dependence, and common factors

Carlos Mendez-Guerra and Tifani Siregar

Letters in Spatial and Resource Sciences, 2023, vol. 16, issue 1, No 40, 20 pages

Abstract: Abstract We analyze the space-time dynamics of Indonesia’s provincial unemployment by simultaneously accounting for their serial persistence, spatial dependence, and common factors. The results show that unemployment rates vary widely across provinces, but have similar patterns over time, indicating the presence of common latent factors. Using the average national unemployment rate as a proxy for common factors, the results indicate that the space-time dynamics of provincial unemployment are characterized by both significant serial persistence and spatial dependence. The results also quantify which regions are most sensitive to national unemployment shocks, providing a deeper understanding of regional unemployment heterogeneity.

Keywords: Regional unemployment; Cyclical sensitivity; Spatial dependence; Serial persistance; Common factors; Indonesia (search for similar items in EconPapers)
JEL-codes: C21 E24 E32 R23 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s12076-023-00364-6

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