Regional unemployment and productivity in Europe
We analyse the relationship between regional unemployment and labour productivity in Europe, basing our empirical analysis on the predictions of a Neary-type General Oligopolistic Equilibrium trade model with efficiency-wages. Using semiparametric and dynamic panel data estimators and controlling for other factors, we give evidence of a nonlinear relationship between productivity and regional unemployment in Europe: with a level of productivity smaller than a certain threshold, this relationship is negative, while no relation occurs in the case of higher productivity regions. This evidence proves an important role of a wage-floor (induced by efficiency wages and exacerbated by institutional factors) under which the productivity gap cannot be compensated by a wage gap. Copyright (c) 2007 the author(s). Journal compilation (c) 2007 RSAI.
Year of publication: |
2008
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Authors: | Basile, Roberto ; Benedictis, Luca De |
Published in: |
Papers in Regional Science. - Wiley Blackwell. - Vol. 87.2008, 2, p. 173-192
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Publisher: |
Wiley Blackwell |
Saved in:
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