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Structural change and regional employment dynamics

  • A casual look at regional unemployment rates reveals that there are vast differences, which cannot be explained by different institutional settings. Our paper attempts to trace these differences in the labor market performance back to the regions' specialization in products that are more or less advanced in their product cycle. The model we develop shows how individual profit and utility maximization endogenously yields higher employment levels in the beginning. In later phases, however, employment decreases in the presence of process innovation. Our model suggests that the only way to escape from this vicious circle is to specialize in products that are at the beginning of their "economic life". The model is based on an interaction of demand and supply side forces.

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Author:Uwe BlienGND, Helge SannerGND
Series (Serial Number):Volkswirtschaftliche Diskussionsbeiträge (82)
Document Type:Working Paper
Year of Completion:2006
Publishing Institution:Universität Potsdam
Release Date:2007/06/22
RVK - Regensburg Classification:QD 100
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Notes extern:Blien, Uwe: Structural change and regional employment dynamics / Uwe Blien ; Helge Sanner. - Potsdam : Univ., 2006. - 22 Bl. : graph. Darst.
(Volkswirtschaftliche Diskussionsbeiträge : Diskussionsbeitrag ; 82)