Sectoral shifts, diversification and regional unemployment: evidence from local labour systems in Italy
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Sectoral shifts, diversification and regional unemployment: evidence from local labour systems in Italy Roberto Basile • Alessandro Girardi • Marianna Mantuano • Francesco Pastore
Published online: 14 September 2012 Springer Science+Business Media New York 2012
Abstract Using Local Labour Systems (LLSs) data, this work aims at assessing the effects of sectoral shifts and industry specialization patterns on regional unemployment in Italy over the years 2004–2008. Italy represents an interesting case study because of the high degree of spatial heterogeneity in local labour market performance and the wellknown North–South divide. Furthermore, the presence of strongly specialized LLSs (Industrial Districts, IDs) allows us to test whether IDs perform better than highly diversified urban areas thanks to the effect of agglomeration economies, or viceversa. Building on a semiparametric spatial auto-regressive framework, our empirical investigation documents that sectoral shifts and the degree of specialization exert a negative role on unemployment dynamics. By contrast, highly diversified areas turn out to be characterized by better labour market performances.
This paper has been presented at the 4th WIFO Regional Economics Workshop on: Regional Development and Mobility in the EU. We thank all participants and, in particular, Geoffrey Hewings and Klaus Nowotny for useful comments. The usual disclaimer applies. R. Basile Second University of Naples, Capua (CE), Italy e-mail: [email protected] A. Girardi M. Mantuano ISTAT (Italian Institute of Statistics), Rome, Italy e-mail: [email protected] M. Mantuano e-mail: [email protected] F. Pastore (&) Second University of Naples, Santa Maria Capua Vetere (CE), Italy e-mail: [email protected] F. Pastore IZA (Institute for the Study of Labour) of Bonn, Bonn, Germany
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Empirica (2012) 39:525–544
Keywords Unemployment Sectoral shift Diversification Spatial dependence Nonparametrics JEL Classification
C14 C21 L16 R23
1 Introduction The ongoing process of international relocation of manufacturing activities towards Eastern European low-labour-cost regions and towards other emerging countries (such as China, India and Brazil) has been contributing to modify the European map of interregional product specialization, with old member states (EU-15 countries) being progressively more specialized in the service sector and the twelve newly accessed countries gradually specializing in manufacturing activities. The reallocation of labour resources within the enlarged Europe (caused by outward foreign direct investments, labour saving technological change, deindustrialization of manufacturing and growth of service activities) may have generated significant turmoil in local labour markets, with backward areas being particularly exposed to this structural change due to their persistent weaknesses: low industrial diversification, high specialization in low skilled labour intensive activities, low attractiveness to foreign direct investment, economic de
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