Unemployment Flow Regimes and Regional Unemployment Disparities

Abstract

Almost all studies of regional and local unemployment are concerned with unemployment stock rates. In this paper, attention is focused on the unemployment flows behind these stocks. By using data for the British regions over the 1980s and 1990s, we show that regional unemployment-rate disparities are a direct reflection of different underlying regional unemployment ‘flow regimes’; that is, different patterns of inflows into, and outflows from, unemployment. In the 1980s these differences in regional flow regime were marked, but since the beginning of the 1990s they have narrowed. In addition, there appear to have been distinct ‘switches’ in regime in particular regions. These trends and shifts are considered alongside the debates surrounding the end of the ‘north—south’ unemployment divide in Britain; the claim that the British labour market is moving towards a US-style flexible, high-unemployment-turnover model; and the effects of various changes to the unemployment benefit system designed to restrict the numbers of claimants on that system.