SPATIAL AUTOCORRELATION IN BRITISH UNEMPLOYMENT

The recent literature on local unemployment in Britain and the U.S. is reviewed, and a model estimated for Britain which is consistent with the findings of that literature. Spatial econometric techniques are applied to test and elaborate on that model. The results indmte the presence of significant...

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Bibliographic Details
Published in:Journal of regional science 1995-11, Vol.35 (4), p.641-658
Main Author: Molho, Ian
Format: Article
Language:English
Subjects:
Bgi / Prodig
Economic theories
Employment. Labour
Human geography
Political and economic geography
Spatial aspects
Unemployment
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Summary:The recent literature on local unemployment in Britain and the U.S. is reviewed, and a model estimated for Britain which is consistent with the findings of that literature. Spatial econometric techniques are applied to test and elaborate on that model. The results indmte the presence of significant spillovers in adjustments to local demand shocks. These spillovers occur over a wide spatial field and are strongest after a lag, suggesting that they reflect migration behavior. In addition, highly localized spatial interactions are found, consistent with commuting adjustments in response to shocks. Incorporating these effects eliminates spatial autocorrelation from the residuals. A simulation exercise is undertaken to demonstrate the effects of supply‐ and demand‐side shocks on the model solution.
ISSN:0022-4146
1467-9787
DOI:10.1111/j.1467-9787.1995.tb01297.x