Unemployment Differentials Research Articles

Discrimination and Skill Differences in an Equilibrium Search Model*

We analyze an equilibrium search model with three sources for wage and unemployment differentials among workers with the same (observed) human capital but different appearance (race): unobserved productivity, search intensities, and discrimination due to an appearance‐based employer disutility factor. We show that the structural parameters are identified using labor market survey data. Estimation results for a black and white high school graduate sample imply: black productivity is 3.3% lower than white productivity; the employer's disutility factor is 31% of the white's productivity level; and 56% of firms have a disutility factor toward blacks.

Can skill-biased technological change compress unemployment rate differentials across education groups?

Our aim is to explain why the pattern of relative unemployment rates by education groups was non monotonic in most of the OECD countries. In a two-sector matching model, a simple unexpected productivity shock biased against unskilled labor can replicate the observed dynamics. Demographic effects of skill-biased shocks can be related to inequality in the distribution of wealth.

Migration and Adjustments to Shocks in Transition Economies

Does migration facilitate regional adjustment to idiosyncratic shocks in transition economies; If so, one should find a strong relationship between regional unemployment and average wages on the one hand, and migration flows on the other. Yet, the evidence from transition economies indicates that the efficacy of migration in reducing inter-regional unemployment and wage differentials has been low. High wages appear to stimulate overall mobility rather than encourage a net immigration, and, similarly, unemployment tends to discourage overall mobility rather than encourage net emigration. Moreover, migration flows have actually been declining in the course of transition, even as inter-regional disparities have been rising.

Widening differences in Italian regional unemployment

Regional unemployment differentials among Italian regions have widened since the mid 1980s, especially between the leading Northern and Central areas and the less developed South. We suggest that the following elements are important to explain the observed phenomenon: (a) employment performance in the South has worsened considerably in the presence of sustained labor force growth; (b) labor mobility from the South to the North–Central areas has sensibly declined with the reduction in earnings differentials and with the increase in social transfers per head; (c) real wages in the South are not affected by local unemployment conditions but depend on the unemployment rate prevailing in the leading areas; (d) the labor share increased particularly fast in the South during the 1970s, mainly as a consequence of the elimination of institutions that allowed the presence of significant wage differentials; (e) a parsimonious description of the increase in regional unemployment differentials is that the Northern and the Southern areas responded in an asymmetric way both to the increase in real social transfers per head and to the reduction in the real price of energy.

On the Identification of Relative Wage Rigidity Dynamics:
 A Proposal for a Methodology on Cross-Section Data and Empirical Evidence for Poland in Transition

We present a new and simple empirical methodology to identify relative wage rigidity dynamics. The methodology is applied to data from the Polish Labour Force Survey for the period 1994 to 1998. We estimate ceteris paribus changes in relative wage and unemployment differentials for various labour market defining characteristics. A simultaneous increase in the relative wage and the unemployment likelihood is defined as a relative wage rigidity dynamic for a labour market characteristic. We find that the Polish wage structure generated hardly any rigidities between 1994 and 1998 nor did it reduce possibly existing rigidities during that period.

Migration and Labour Market Adjustment: Empirical evidence from Finland 1985‐90

This paper addresses the question of the role of migration as an adjustment process by analysing the relationship between unemployment and labour force mobility. The empirical analysis deals with long-distance migration in Finland in the period 1985-90. When considered within a multivariate setting in which personal and place characteristics are held constant, the results show that higher origin unemployment rates increase outmigration, but not particularly for unemployed workers. Three outcomes are deduced from the results. First, the equilibrating process of interregional migration is slow-although working in the right direction-and becomes steadily slower as regional unemployment differentials fall. Secondly, the size of high-unemployment regions, as measured in terms of the labour force, decreases during the adjustment process as employed persons also leave the region. Thirdly, high-unemployment regions in particular lose their young and educated workers. The danger of the process of cumulative causation is great in these regions.

On the Identification of Relative Wage Rigidity Dynamics: A Proposal for a Methodology on Cross-Section Data and Empirical Evidence for Poland in Transition

We present a new and simple empirical methodology to identify relative wage rigidity dynamics. The methodology is applied to data from the Polish Labour Force Survey for the period 1994 to 1998. We estimate ceteris paribus changes in relative wage and unemployment differentials for various labour market defining characteristics. A simultaneous increase in the relative wage and the unemployment likelihood is defined as a relative wage rigidity dynamic for a labour market characteristic. We find that the Polish wage structure generated hardly any rigidities between 1994 and 1998 nor did it reduce possibly existing rigidities during that period.

Widening Differences in Italian Regional Unemployment

Regional unemployment differentials among Italian regions have widened since the mid 1980s, especially between the leading Northern and Central areas and the underdeveloped South. We suggest that the following elements are important to explain the observed phenomenon: a) employment performance in the South has worsened considerably in the presence of sustained labour force growth; b) labour mobility from the South to the NC areas has sensibly declined with the reduction in earnings differentials and with the increase in social transfers per head; c) real wages in the South are not affected by local unemployment conditions but depend on the unemployment rate prevailing in the leading areas; d) the labour share increase particularly fast in the South during the 1970s, mainly as a consequence of the elimination of institutions that allowed the presence of significant wage differentials; e) a parsimonious description of the increase in regional unemployment differentials is that the Northern and Southern areas responded in an asymmetric way both to the increase in real social transfers per head and to the reduction in the real price of energy.

An Equilibrium Search Model with Coworker Discrimination

This article analyzes the effect of coworker discrimination on wage and unemployment differentials between males and females using a search model. An increase in female participation drives up the wage offer to female workers and raises female employment. Moreover, an increase in the degree of discrimination by males results in gains to them in terms of higher wages and lower unemployment but results in losses to females in terms of lower wages and higher unemployment. The benefit to males provides an explanation for the persistence of discrimination.

Some empirical evidence on the determinants of immigration from Fiji to New Zealand: 1970–94

This paper formulates and tests a model for migration from Fiji to New Zealand within the human capital framework using time‐series data from 1970–94. The error‐correction model, which appears to adequately characterise the data generation process, reveals that wage and unemployment differentials are statistically significant variables explaining permanent and long‐term migration from Fiji to New Zealand. Equally important are the findings for the living standard differential between Fiji and New Zealand and Fiji's political instability, while exhibiting the correct signs on their coefficients, these are not statistically significant variables in explaining permanent and long‐term migration. The cost variable did not prove to be important in explaining migration from Fiji to New Zealand.

A Multi-stream Analysis of the Changing Pattern of Interregional Migration in Great Britain, 1960‐1991

GORDON I. and MOLHO I. (1998) A multi-stream analysis of the changing pattern of interregional migration in Great Britain, 1960-1991, Reg. Studies, 32 , 309-323. This paper uses a combination of spatial and econometric modelling techniques to investigate longer term patterns and processes of change in British interregional migration, starting from a distinction between an (employment oriented) national movement stream and a (housing and environment related) regional stream. The two major influences on the longer distance flows are found to be relative rates of employment growth and perceived environmental quality, but while the former induces marked fluctuations within the observation period, the influence of the latter factor shows little variation, with no sign of a clean break. There is, however, evidence of a sharply reduced responsiveness of migration to unemployment differentials since the mid-1970s. GORDON I. et MOLHO I. (1998) Une analysè a flux multiples de l'évolution de la distribution de la migration interrégionale en Grande-Bretagne de 1960 à 1991, Reg. Studies 32 , 309-323. A partir d'une distinction entre un flux national (orienté vers l'emploi) et un flux régional (orienté vers le logement et le milieu), cet article se sert d'une combinaison des techniques de modélisation et spatiales et économétriques afin d'examiner les distributions à plus long terme et les processus de changement de la migration interrégionale en Grande-Bretagne. Les taux relatifs de la croissance de l'emploi et la qualité du milieu perçue s'avèrent les deux influences majeures sur les flux à plus longue distance, mais alors que le premier entraîne d'importantes fluctuations pendant la période d'observation, l'influence de ce dernier varie peu, sans aucun signe d'une rupture définitive. Cependant, tout indique que la réaction de la migration aux écarts de chômage a chuté sensiblement depuis le milieu des années 70. GORDON I. und MOLHO I. (1998) Eine Mehrfachanalyse der Veränderungen bei zwischenregionaler Wanderung in Großbritannien im Zeitraum 1960‐1991, Reg. Studies 32, 309‐323. Dieser Aufsatz benutzt eine Kombination räumlicher und ökonometrischer Modelltechniken, um langfristigere Muster und Vorgänge der bei zwischenregionaler Wanderung in Großbritannien auftretenden Veränderungen zu untersuchen. Dabei wird zwischen von Erwerbstätigkeit bestimmter, das ganze Land betreffender Strömung und Wohnsitz- und umgebungsbezogener, regional beschränkter Strömung unterschieden. Es stellt sich heraus, daß die relativen Zuwachsraten der Erwerbstätigkeit sowie die Wahrnehmung bestimmter Eigenschaften der Umgebung die beiden Haupteinflüsse auf die über größere Entfernungen stattfindenden Bewegungen sind, doch während erstere deutliche Schwankungen im Untersuchungszeitraum verursachte, wies letztere nur geringfügige Abweichungen auf, und keinerlei Anzeichen einer eindeutigen Beendigung. Es gibt jedoch Anzeichen einer seit Mitte der siebziger Jahre stark nachlassenden Aufgeschlossenheit für Wanderung bei Erwerbslosigkeitsunerschieden.

State Unemployment Differentials: Equilibrium Factors vs. Differential Employment Growth

: Differentials in U.S. state unemployment rates were persistent in the early 1990s. In addition, states with higher employment growth did not necessarily have the lowest unemployment rates. Thus, this paper examines the differentials in U.S. state unemployment rates from 1992 to 1994, decomposing them into the parts that were due to differences in recent employment growth, and those that were due to longer-term equilibrium factors. Also, using the shift-share model, employment growth differences are decomposed into an industry mix component and a competitiveness component. The decomposition of the 1992 to 1994 unemployment rate differentials is based on an econometric equation estimated using panel data from 1972 to 1991. Explanatory equilibrium factors included in the model are amenities, demographic characteristics, education, industry composition, labor mobility, and wage rates.

State Unemployment Differentials: Equilibrium Factors vs. Differential Employment Growth

State Unemployment Differentials: Equilibrium Factors vs. Differential Employment Growth

URBAN RENEWAL AND DISPLACEMENT IN HONG KONG

This paper argues that, in Hong Kong, urban renewal partially mitigates negative residential displacement outcomes. Theoretical underpinnings, rationale, and research methodology used to study the cause and effect of urban redevelopment are presented. Baseline information on the scope and nature of redevelopment in Hong Kong reveals that approximately 1.5 buildings a day have been demolished over the last 10 years. Evidence from empirical characterization and correlation analysis by district supports production and class variables as determinants of redevelopment. Projections based on building-demolition data, combined with older housing estate populations, suggest that the rate of redevelopment-led displacement is 14,000 urban dwellers annually. Outlined are renewal policies aimed at social equity in redevelopment, better zoning, and public-private development agency cooperation. Case studies of households experiencing urban renewal show that, in spatial, economic, and social terms, the outcome appears to be favorable for 55% of those displaced. Local influences of cause and outcomes of redevelopment are rapid economic growth, mass public housing provisions, and low unemployment differentials between various locations in the Territory. Directions for future policy and research are suggested.

An empirical puzzle: Falling migration and growing unemployment differentials among Italian regions

We investigate the causes behind the low and falling mobility levels in (Southern) Italy. We argue that a combination of demographic factors, high mobility costs and inefficiencies in the job matching process may account for the fall in interregional migration.

Regional mismatch and the transition to a market economy

Regional unemployment differentials in transition countries are large by western standards. A further widening of these disparities has been prevented by a slowing down of restructuring and large flows from unemployment to non-participation in high unemployment regions. Wage differentials are only mildly increasing in response to regional unemployment differentials and there is little labour mobility across regions. A distinguishing feature of the dynamics of regional disparities is the apparent feedback from widening unemployment differentials to the pace of restructuring. The regional dispersion of employment reductions displays less persistence than the dispersion of unemployment rates.

Spatial variations in U.S. unemployment

Interstate unemployment rate differentials are large, tend to persist, and have not converged in recent times. The interstate differential in the natural rate of unemployment seems partially explained by several factors related to labor costs, including wage rates and such institutional factors as unionization, welfare, and probably tax policy. Differential welfare incidence may explain the black-white unemployment differential. Variations in intertemporal fluctuations in unemployment across states seem related to institutionalized wage rigidity caused by such factors as unions and welfare. For still unexplained reasons, unemployment tends to be higher in the West, deep South, and the industrial Midwest.

Eleven years of community-based directly observed therapy for tuberculosis

<h3>Objective.</h3> —To evaluate community-based directly observed therapy (DOT) for tuberculosis (TB) control. <h3>Design.</h3> —Ecological study. <h3>Methods.</h3> —Three comparisons were made in this descriptive study. (1) An 11-year retrospective comparison of TB case rates, sputum conversion rates (SCRs), rates of therapy completion, and confounding factors (acquired immunodeficiency syndrome [AIDS], immigration, unemployment, and poverty) in Baltimore, Md, with those of the five major US cities having the highest TB incidence in 1981 but which did not have comprehensive DOT programs. (2) An 11-year trend of TB in Baltimore and the 19 major US cities with the highest TB incidence in 1981. (3) A 7-year trend in TB in both city groups between 1985 and 1992. <h3>Setting.</h3> —Twenty US metropolitan cities with more than 250 000 residents. <h3>Results.</h3> —Since 1981, Baltimore experienced the greatest decline in TB incidence (35.6 cases per 100000 population, 1981; 17.2 cases per 100000 population, 1992 [-51.7%]), and city rank for TB (sixth in 1981,28th in 1992). Conversely, the average incidence of TB increased 2.1% in the five-city cohort and increased 1.8% in the 19-city cohort. Since 1985, TB incidence increased 35.3% in the five-city cohort and 28.5% in the 19-city cohort, but declined 29.5% in Baltimore. From 1986 through 1992, Baltimore's DOT-managed cases had the highest annual SCRs at 3 months (mean, 90.7%), and the highest completion rates for standard anti-TB therapy (mean, 90.1%) when compared with the five cities. These trends could not be attributed to differentials in AIDS, immigration, poverty, or unemployment. Increasingly, more Baltimore cases were treated under DOT (86.5%, 1993) overtime. Disease relapse rates remained low, even among HIV-infected patients. Within Baltimore, the documented SCR was significantly higher among DOT-managed cases compared with non—DOT-managed cases (<i>P</i>&lt;.05); multidrug resistance remains rare (0.57%). Within Maryland, Baltimore accounted for 44.4% of all TB cases in 1981, compared with 28.7% in 1992 (<i>P</i>&lt;.001). <h3>Conclusions.</h3> —In contrast to the national TB upswing during the 1980s, Baltimore experienced a substantial decline in TB following implementation of community-based DOT, despite highly prevalent medicosocial risk factors. Directly observed therapy facilitated high treatment completion rates and bacteriologic evidence of cure. Directly observed therapy could help reduce TB incidence in the United States, particularly in cities with high case rates. (<i>JAMA</i>. 1995;274:945-951)

Eleven Years of Community-Based Directly Observed Therapy for Tuberculosis

To evaluate community-based directly observed therapy (DOT) for tuberculosis (TB) control. Ecological study. Three comparisons were made in this descriptive study. (1) An 11-year retrospective comparison of TB case rates, sputum conversion rates (SCRs), rates of therapy completion, and confounding factors (acquired immunodeficiency syndrome [AIDS], immigration, unemployment, and poverty) in Baltimore, Md, with those of the five major US cities having the highest TB incidence in 1981 but which did not have comprehensive DOT programs. (2) An 11-year trend of TB in Baltimore and the 19 major US cities with the highest TB incidence in 1981. (3) A 7-year trend in TB in both city groups between 1985 and 1992. Twenty US metropolitan cities with more than 250,000 residents. Since 1981, Baltimore experienced the greatest decline in TB incidence (35.6 cases per 100,000 population, 1981; 17.2 cases per 100,000 population, 1992 [-51.7%]), and city rank for TB (sixth in 1981, 28th in 1992). Conversely, the average incidence of TB increased 2.1% in the five-city cohort and increased 1.8% in the 19-city cohort. Since 1985, TB incidence increased 35.3% in the five-city cohort and 28.5% in the 19-city cohort, but declined 29.5% in Baltimore. From 1986 through 1992, Baltimore's DOT-managed cases had the highest annual SCRs at 3 months (mean, 90.7%), and the highest completion rates for standard anti-TB therapy (mean, 90.1%) when compared with the five cities. These trends could not be attributed to differentials in AIDS, immigration, poverty, or unemployment. Increasingly, more Baltimore cases were treated under DOT (86.5%, 1993) over time. Disease relapse rates remained low, even among HIV-infected patients. Within Baltimore, the documented SCR was significantly higher among DOT-managed cases compared with non-DOT-managed cases (P < .05); multidrug resistance remains rare (0.57%). Within Maryland, Baltimore accounted for 44.4% of all TB cases in 1981, compared with 28.7% in 1992 (P < .001). In contrast to the national TB upswing during the 1980s, Baltimore experienced a substantial decline in TB following implementation of community-based DOT, despite highly prevalent medicosocial risk factors. Directly observed therapy facilitated high treatment completion rates and bacteriologic evidence of cure. Directly observed therapy could help reduce TB incidence in the United States, particularly in cities with high case rates.

Efficiency wages, involuntary unemployment and urban spatial structure

A labor market model is developed within an urban spatial context, where it is shown that efficiency-wage policies can lead to significant levels of involuntary unemployment. Commuting cost differences between workers and nonworkers tend to increase unemployment, and competition for land tends to segregate workers and nonworkers, with nonworkers relegated to the urban fringe. These findings are extended to a two-city system, where it is shown that even with free mobility of workers, significant wage and unemployment differentials can exist between cities characterized by different levels of productivity.