Regional Dynamics of Unemployment in Poland A Convergence Approach

Abstract

In this paper we approach the regional unemployment dynamics in Poland. Using policy relevant NUTS4 level data from 1999 to 2006, we employ tools typically applied to income convergence analyses to inquire the patterns of unemployment distribution. We apply diverse analytical techniques to seek traces of convergence, including β and σ convergence as well as pass-through analysis.We demonstrate that the unemployment rate distribution is highly stable over time, while only weak 'convergence of clubs' is supported by the data and only for the high unemployment regions. Results suggest no support in favour of β-type convergence, i.e. convergence of levels. Even controlling for nation-wide labour market outlooks (conditional convergence) does not provide any support to this hypothesis. Further, regions with both very high and very low unemployment show signs of high persistence and low mobility in the national distribution, while those in the middle tend to demonstrate higher mobility and essentially no persistence of regional unemployment differentials. This diagnosis is confirmed by σ-convergence analysis which indicates no general divergence or convergence patterns. Transitions seem to be slightly more frequent, but at the same time less sustainable for middle range districts, while movements up and down the ladder occur predominantly for the same districts.This methodology allows to define the patterns of local labour market dynamics, pointing to differentiated divergence paths. Importantly, these tendencies prevail despite cohesion financing schemes, which allocate relatively more resources to deprived regions.

Poles Apart? EU Enlargement and the Labour Market Outcomes of Immigrants in the United Kingdom

“…For information (in Polish) on regional unemployment rates, see http://www.stat.gov.pl/gus. Tyrowicz and Wojcik (2007) find that the spatial distribution of Polish unemployment was highly stable between 1999 and 2006, implying that unemployment in Poland is mainly structural in character. Officially recorded unemployment was also relatively high in Slovakia in 2003, running at slightly over 16 per cent, whilst unemployment rates of less than 12 per cent were recorded in the remainder of the EU8.…”

Labour Turnover and the Spatial Distribution of Unemployment: A Panel Data Analysis Using Employment Registry Data

“…This analysis consisted of estimating the coefficients on turnover, inflows and outflows at different deciles of the distribution of poviat unemployment rates at the beginning of the analysed period. In fact, poviats rarely change these decimal groups, while most of the mobility is found in the middle of the distribution, which suggests that (i) grouping based on the initial unemployment rate is valid for the whole period of analysis (Tyrowicz and Wójcik, 2010a).…”

Persistence of Regional Unemployment: Application of a Spatial Filtering Approach to Local Labor Markets in Germany*

“…Some attention has been devoted to the internal dynamics of regional unemployment as well, and to each region's sensitivity to shocks, seasonal factors, and unemployment persistence. The literature has mostly focused on a macroeconomic setting, such as in a “nonaccelerating inflation rate of unemployment (NAIRU)” or in a (conditional/unconditional) “convergence toward a natural rate of unemployment” perspective (following the approach of Blanchard and Summers, 1986; see, for example, Decressin and Fatás, 1995; Song and Wu, 1997; Bayer and Juessen, 2007; Garcia‐del‐Barrio and Gil‐Alana, 2009; Tyrowicz and Wójcik, 2010a, b, 2011). From a methodological perspective, these studies generally test for unit roots in the unemployment series 1 .…”