Adjustment to Regional Labour Market Shocks
Aki Kangasharju () and
Sari Pekkala Kerr ()
No 274, Discussion Papers from VATT Institute for Economic Research
This paper analyses regional labour market adjustment in the Finnish provinces during 1976-2000. It investigates the inter-relations of employment, unemployment, labour force participation and migration to see how a change in region-specific and total labour demand is adjusted. The analysis reveals that a region-specific labour demand shocks adjust mainly via participation whereas total shocks are adjusted by unemployment. The region-specific component of labour 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 gets a large role in the adjustment process.
Keywords: Labour market, employment, unemployment, migration, shock adjustment, Economic growth, Taloudellinen kasvu, Labour market, Työmarkkinat, Regional development, Aluekehitys, Effectiveness of public services, Julkisten palvelujen vaikuttavuus, J600 - Mobility, Unemployment, and Vacancies: General, R230 - Urban, Rural, and Regional Economics: Regional Migration; Regional Labor Markets; Population, (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:fer:dpaper:274
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