Income and Employment Dynamics in Europe

Abstract

Cosci S. and Sabato V. (2007) Income and employment dynamics in Europe, Regional Studies 41, 295–309. The study intends to deepen the analysis of the dynamics of income and employment in Europe between 1989 and 1996 by considering the complex spatial consequences of the failure of the Fordist production model. Previous studies found evidence of polarization in unemployment rates and persistence in per-capita income in European regions. When Objective 1 regions are excluded from the analysis, different results are obtained but a marked difference in the dynamics of income and unemployment rate is still found. This difference may have been caused by country effects and the features of two specific kinds of regions: old industrialized regions and urban and capital regions. The relationship between the dynamics of employment and the dynamics of income is, therefore, significantly affected by the spatial consequences of production changes and socio-economic transformations.

Cosci S. et Sabato V. (2007) Les dynamiques du revenu et de l'emploi en Europe, Regional Studies 41, 295–309. Cette étude cherche à approfondir l'analyse des dynamiques du revenu et de l'emploi en Europe de 1989 à 1996 en tenant compte des retombées géographiques complexes concernant l'échec du modèle de production fordiste. Des études antérieures ont fourni des preuves de la divergence des taux de chômage et de la stabilité des revenus par tête dans les régions d'Europe. Déduction faite des régions relatives à l'Objectif 1, on obtient des résultats différents. Toujours est-il que les dynamiques du revenu et de l'emploi s'avèrent marquées. Il se peut que cette différence s'explique par les caractéristiques du pays en question et de deux typologies de régions particulières: de vieilles régions industrielles et urbaines et des régions centrales. Le rapport entre les dynamiques de l'emploi et du revenu est sensiblement influencé par les retombées géographiques des changements de production et de la transformation socio-économique.

Convergence régionale Chômage Estimations non paramétriques

Cosci S. und Sabato V. (2007) Dynamik von Einkommen und Beschäftigung in Europa, Regional Studies 41, 295–309. Mit dieser Studie soll die Analyse der Dynamik von Einkommen und Beschäftigungsniveau in Europa im Zeitraum von 1989 bis 1996 vertieft werden, indem die komplexen räumlichen Auswirkungen des Fehlschlags des Fordschen Produktionsmodells untersucht werden. In früheren Studien fanden sich Belege für eine Polarisierung der Arbeitslosigkeit und eine Fortdauer des Pro-Kopf-Einkommens in europäischen Regionen. Wenn wir die Ziel-1-Regionen aus der Analyse ausklammern, erhalten wir abweichende Ergebnisse, wobei jedoch immer noch ein ausgeprägter Unterschied in der Dynamik von Einkommen und Arbeitslosigkeit zu beobachten ist. Dieser Unterschied wird eventuell durch Landeseffekte und durch die Merkmale von zwei spezifischen Arten von Regionen verursacht: den alten, industrialisierten sowie den urbanen und Hauptstadtregionen. Die Beziehung zwischen Beschäftigungs- und Einkommensdynamik wird somit erheblich durch die räumlichen Konsequenzen der Produktionsänderungen und des sozioökonomischen Wandels beeinflusst.

Regionale Konvergenz Arbeitslosigkeit Nicht parametrische Schätzungen

Cosci S. y Sabato V. (2007) Dinámicas de ingresos y desempleo en Europa, Regional Studies 41, 295–309. Con este estudio intentamos ahondar en los análisis de las dinámicas de ingresos y empleo en Europa durante el periodo que abarca de 1989 a 1996 teniendo en cuenta las consecuencias espaciales complejas del fracaso del modelo fordista de producción. En estudios previos se demostró la polarización en las tasas de desempleo y la continuación de los ingresos per cápita en las regiones europeas. Si excluimos del análisis las regiones del Objetivo 1, obtenemos resultados diferentes pero todavía observamos una marcada diferencia en las dinámicas de los ingresos y la tasa de desempleo. Esta diferencia podría ser causada por efectos de cada país y por las características de dos tipos específicos de regiones: las antiguas regiones industrializadas, y las regiones urbanas y capitales. Por consiguiente, la relación entre las dinámicas del empleo y las dinámicas de ingresos se ve significativamente afectada por las consecuencias espaciales en los cambios de producción y las transformaciones socioeconómicas.

Convergencia regional Desempleo Estimaciones no paramétricas

Keywords:

• Regional convergence
• Unemployment
• Non-parametric estimations

Notes

1. There is Verdoon's optimistic view, adopted in the study of European regions by Fingleton and McCombie (1998), that output growth is positively correlated with both productivity and employment; as well as the expectation of a negative relationship between productivity growth and unemployment level as given by Aghion and Howitt (1994).

2. For a survey on this literature, see Rodríguez-Pose (1998). Consistently with this interpretation, in a previous work studying the dynamics of European regional per-capita income over the periods 1980–1988 and 1989–96, the present authors found more mobility during the 1980s than during the following period (Cosci and Sabato, 2004).

3. Objective 1 regions are those that received EU Structural Funds in the period of interest.

4. The list of the regions is given in the Appendix.

5. In Tables 1–4, as in Figs 1–5, per-capita income and unemployment rate are measured as the regional values relative to the sample mean, so that, for example, in Table 1 class [0.00–0.75) includes all the regions having per-capita income levels between 0 and 0.75 times the average per-capita income of the sample. As classes are defined so as they have almost the same number of observations per class, they are different in each matrix.

6. As shown by COSCI and SABATO (2004), most of the above-average unemployment regions are those that utilized Objective 2 EU Structural Funds to an above-average extent.

7. Note that if regions starting with higher-than-average unemployment rates are also characterized by lower-than-average per-capita income, when employment rises with per-capita income, a convergence in income and unemployment is observed. Otherwise an increase in income and employment would cause different relative dynamics of income and unemployment rate. For example, four regions in the UK (East Anglia, East Midlands, South West and West Midlands) are characterized in 1989 by lower-than-average unemployment rates (between 0.49 and 0.91) and by lower-than-average per-capita income (between 0.84 and 0.91); in this case, an increase in per-capita income and employment would cause convergence in per-capita income and divergence in unemployment in the transition probability matrix. In any case, since stability in income and mobility in unemployment are observed, one can deduce that many regions experienced increases or decreases in their unemployment rates without changing their position in terms of regional per-capita income.

8. As documented in a more detail by COSCI and SABATO (2005), all the regions in the present sample recorded variations of the participation rate much smaller than those of unemployment rate.

9. The same effect for the negative regional data is obtained by dividing (instead of multiplying) the regional data by the country weight coefficient. Note that Rodríguez-Pose's methodology cannot be used when the country weight coefficient results in a negative. Since the rate of variation of the unemployment rate in the Netherlands is negative, its four regions have been excluded from the analysis. Also excluded from the analysis are Denmark, Ireland and Luxembourg because in these cases the region coincides with the country.

10. If one excludes the outlier Basse-Normandie from the sample, the Pearson correlation ratio is still not significant (0.304).

11. If one excludes the outlier South East Anglia from the sample, the Pearson correlation ratio is still not significant (0.281).

Additional information

Notes on contributors

Stefania Cosci

Email: [email protected]

Valentina Sabato

Email: [email protected]