Mind the gap
Subtitle: unemployment in the new eu regions
By: by Anna Maria Ferragina, Francesco Pastore.
Contributors: Pastore, Francesco
Series: Discussion paper ;; no. 1565; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1565
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Unemployment -- Central Europe.; Unemployment -- Europe, Eastern.; Central Europe -- Economic conditions -- Regional disparities.; Europe, Eastern -- Economic conditions -- 1989- -- Regional disparities.
Description: "The paper surveys the theoretical and empirical literature on regional unemployment during transition in Central and Eastern Europe. The focus is on Optimal Speed of Transition (OST) models and on comparison of them with the neoclassical tradition. In the typical neoclassical models, spatial differences essentially arise as a consequence of supply side constraints and institutional rigidities. Slow-growth, high-unemployment regions are those with backward economic structures and constraints on factors mobility contribute to making differences persistent. However, such explanations leave the question unanswered of how unemployment differences arise in the first place. Economic transition provides an excellent testing ground to answer this question. Prefiguring an empirical law, the OST literature finds that the high degree of labour turnover of high unemployment regions is associated with a high rate of industrial restructuring and, consequently, that low unemployment may be achieved by implementing transition more gradually. Moreover, international trade, FDI and various agglomeration factors help explain the success of capital cities compared to peripheral towns and rural areas in achieving low unemployment"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Includes bibliographical references.
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