Unemployment in Europe: A comparative analysis of regional disparities in Germany, Italy and the UK

Abstract

This paper investigates spatial disparities in unemployment in three Member States of the EU. It attempts to identify the factors responsible for the persistence of regional unemployment disparities in Germany, Italy and the UK during 1984-94. The empirical results indicate that a substantial proportion of the variation in unemployment rates between NUTS2 level regions can be explained by regional disparities in three key variables: unit labour costs, the industry mix and employment density. The findings are consistent with the view that regional unemployment disparities are explained primarily by regional disparities in economic competitiveness.