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Regional labor markets in Finland: Adjustment to total versus region‐specific shocks
Author(s) -
Pekkala Sari,
Kangasharju Aki
Publication year - 2002
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.2002.tb01237.x
Subject(s) - unemployment , economics , shock (circulatory) , labor demand , labour economics , demand shock , demographic economics , macroeconomics , medicine
This article analyses regional labor market adjustment in the Finnish provinces during 1976–2000. We investigate the inter‐relations of employment, unemployment, labor force participation, and migration to see how a change in region‐specific and total labor demand is adjusted. The analysis reveals that region‐specific labor demand shocks adjust mainly via participation, whereas total shocks are adjusted by unemployment. The region‐specific component of labor demand shock has shorter‐lived effects on unemployment and participation, but its effect on employment is permanent. Conversely, total shocks leave no permanent effect. Migration is more important in the region‐specific case where, after a few years, it acquires a large role in the adjustment process.