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Regional labor markets in Finland: Adjustment to total versus region-specific shocks

Sari Pekkala Kerr () and Aki Kangasharju ()

Papers in Regional Science, 2002, vol. 81, issue 3, 329-342

Abstract: This article analyses regional labor market adjustment in the Finnish provinces during 1976-2000. We investigate the inter-relations of employment, unemployment, labor force participation, and migration to see how a change in region-specific and total labor demand is adjusted. The analysis reveals that region-specific labor demand shocks adjust mainly via participation, whereas total shocks are adjusted by unemployment. The region-specific component of labor demand shock has shorter-lived effects on unemployment and participation, but its effect on employment is permanent. Conversely, total shocks leave no permanent effect. Migration is more important in the region-specific case where, after a few years, it acquires a large role in the adjustment process.

Keywords: Labor market; employment; unemployment; migration; shock adjustment (search for similar items in EconPapers)
JEL-codes: J6 R23 (search for similar items in EconPapers)
Date: 2002-07-01
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