Youth labour market performances in the Russian and Italian regions

Abstract

The focus of this paper is on youth unemployment in Italy and Russia: in both countries, youth unemployment rates (YURs) are higher than adult (or total) ones. Despite these general trends, there are significant regional differences in YURs and above-average YUR regions tend to cluster close to each other. Moreover, a distinction between “North” and “South” regions seems appropriate for both countries. The purpose of this study is to identify key determinants of YURs in the Russian and Italian regions, for the period 2000–2009. We also search for the existence of distance spatial effects. In particular, we estimate a modified Arellano–Bond model for the regional YUR, including some explanatory and control variables (e.g. regional GDP in PPP, regional population density, regional total unemployment rate), together with year dummies and North/South dummies. The use of distance matrixes enables important analysis to be conducted on the role played by spatial effects, which turn out to be significant. Also the negative impact of the 2008–2009 crisis is statistically confirmed (at least in the case of Italy). The relevant policy implications are highlighted in the conclusions.