Regional employment and unemployment

Abstract

A prominent theme in the socioeconomic and regional science literature has been the topic of unemployment. We focus on regional unemployment and put forward candidate series of explanations for it using a basic model of labor supply and demand. The persistence of regional unemployment differentials points to inefficiencies in labor markets that in the long run could affect aggregate unemployment rates. Both a lack of labor demand and a constraint of labor supply increase regional unemployment. We finally discuss people- and place-based policies which aim to reduce high unemployment rates.