The regional distribution of unemployment. What do micro-data tell us?

Regional disparities in unemployment rates are large and persistent. The literature provides evidence of their magnitude and evolution, as well as evidence of the role of certain economic, demographic and environmental factors in explaining the gap between regions of low and high unemployment. Most of these studies, however, adopt an aggregate approach and so do not account for the individual characteristics of the unemployed and employed in each region. This paper, by drawing on micro-data from the Spanish wave of the Labour Force Survey, seeks to remedy this shortcoming by analysing regional differentials in unemployment rates. An appropriate decomposition of the regional gap in the average probability of being unemployed enables us to distinguish between the contribution of differences in the regional distribution of individual characteristics from that attributable to a different impact of these characteristics on the probability of unemployment. Our results suggest that the well-documented disparities in regional unemployment are not just the result of regional heterogeneity in the distribution of individual characteristics. Non-negligible differences in the probability of unemployment remain after controlling for this type of heterogeneity, as a result of differences across regions in the impact of the observed characteristics. Among the factors considered in our analysis, regional differences in the endowment and impact of an individual’s education are shown to play a major role.

Regional heterogeneity in wage distributions. Evidence from Spain.

Regional differences in real wages have been shown to be both large and persistent in the U.S. and the U.K., as well as in the economies of other countries. Empirical evidence suggests that wage differentials adjusted for the cost of living cannot only be explained by the unequal spatial distribution of characteristics determining earnings. Rather, average wage gap decomposition reveals the important contribution made by regional heterogeneity in the price assigned to these characteristics. This paper proposes a method for assessing regional disparities in the entire wage distribution and for decomposing the effect of differences across regions in the endowments and prices of the characteristics. The hypothesis forwarded is that the results from previous studies obtained by comparing average regional wages may be partial and nonrobust. Empirical evidence from a matched employer-employee dataset for Spain confirms marked differences in wage distributions between regions, which do not result from worker and firm characteristics but from the increasing role of regional differences in the return to human capital.

Human Capital and Regional Wage Gaps

This paper uses micro-level data to analyse the effect of human capital on regional wage differentials. The results for the set of Spanish regions confirm that they differ in the endowment of human capital, but also that the return that individuals obtain from it varies sharply across regions. Regional heterogeneity in returns is especially intense in the case of education, particularly when considering its effect on the employability of individuals. These differences in endowment and, especially, in returns to human capital, account for a significant proportion of regional wage gaps.

Fiscal policy and interest rates: the role of financial and economic integration

It is commonly believed that a fiscal expansion raises interest rates. However, these crowding out effects of deficits have been found to be small or non-existent. One explanation is that financial integration offsets interest rate differentials on globalised bond markets. This paper measures the degree of integration of government bond markets, using spatial modelling techniques to take this spillover on financial markets into account. Our main finding is that the crowding out effect on domestic interest rates is significant, but is reduced by spillover across borders. This spillover is important in major crises or in periods of coordinated policy actions. This result is generally robust to various measures of cross-country linkages. We find spillover to be much stronger among EU countries.

Productivity, Technical eficiency and internationalisation of the Spanish chemical sector

relationship between productivity and international position of Spanish chemical firms in the period 2005-2011. The goal is to determine whether companies that follow and international strategy, either with exports or by investment in foreign countries obtain greater productivity growth than these that do not operate in global market. For this purpose a panel data set with microdata has been created. A preliminary analysis of the evolution of productivity growth in the sector is carried out. The measurement of Total Factor Productivity is performed. With the estimated TFP we analyze the differentials in productivity growth, comparing the effects of export and investment behavior with non-international firms.