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2020 ; 13
(2
): 187-199
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Regional unemployment and cyclical sensitivity in Spain
#MMPMID33269030
Almeida A
; Galiano A
; Golpe AA
; Martín JM
Lett Spat Resour Sci
2020[]; 13
(2
): 187-199
PMID33269030
show ga
Unemployment has been routinely used as a measure of the economic cycle. In
addition, regional unemployment rates are characterized by, among other factors,
their relation to the national unemployment rate. In this regard, the literature
on regional sensitivity to the economic cycle has analyzed how fluctuations in
the national unemployment rate affect the regions. In recent years, due to the
great impact of past crises, the development of new econometric techniques and
the possible arrival of new crises, the debate on how sensitive regions are to
the economic cycle has reopened. In Spain, this debate is necessary since
unemployment rates are very high and display a great deal of heterogeneity. We
analyzed regional unemployment rates in Spain between 1978 and 2018 through a
recently developed dynamic spatial econometric model with common factors and
found that some regions are more sensitive than others to the economic cycle. The
results seem to show that in Spain, the sensitivity to the economic cycle
displays a geographical pattern where the most sensitive regions are those
located on the Mediterranean coast. Specifically, we find that the sensitivity to
the economic cycle of unemployment is not determined by the fact that regions
have high or low unemployment; it seems that geographical location plays an
important role. These results can be useful for the national and regional
governments when they implement countercyclical policies.