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.
Regional Unemployment and productivity in Europe / Basile, Roberto Giovanni; DE BENEDICTIS, L.. - In: PAPERS IN REGIONAL SCIENCE. - ISSN 1056-8190. - 87:(2008), pp. 173-192. [10.1111/j.1435-5957.2007.00152.x]
Regional Unemployment and productivity in Europe
BASILE, Roberto Giovanni;
2008
Abstract
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.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
