Commuting effects in Okun’s Law among British areas: evidence from spatial panel econometrics

Silvia Palombi, Roger Perman, Christophe Tavéra

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

This paper examines Okun's Law using a spatial panel approach on NUTS 3 data for Great Britain over the period 1985–2011. The basic specification used as a starting point for the spatial analysis is the relationship between real output growth and unemployment rate changes. This is extended to incorporate spatial lags, to test for the presence of commuting effects, and to accommodate spatial residuals dependence. We estimate various spatial panel models, controlling for heterogeneity across areas, and find consistent evidence of a significant Okun's coefficient. Results also show that spillover effects from labour mobility and interregional linkages matter and have important implications for the validity of the empirical law.
LanguageEnglish
JournalPapers in Regional Science
Early online date13 Mar 2015
DOIs
Publication statusPublished - 2015

Fingerprint

labor mobility
spillover effect
commuting
econometrics
unemployment
spatial analysis
Law
unemployment rate
evidence
labor
effect
rate
test

Keywords

  • unemployment
  • spatial
  • commuting
  • output growth

Cite this

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title = "Commuting effects in Okun’s Law among British areas: evidence from spatial panel econometrics",
abstract = "This paper examines Okun's Law using a spatial panel approach on NUTS 3 data for Great Britain over the period 1985–2011. The basic specification used as a starting point for the spatial analysis is the relationship between real output growth and unemployment rate changes. This is extended to incorporate spatial lags, to test for the presence of commuting effects, and to accommodate spatial residuals dependence. We estimate various spatial panel models, controlling for heterogeneity across areas, and find consistent evidence of a significant Okun's coefficient. Results also show that spillover effects from labour mobility and interregional linkages matter and have important implications for the validity of the empirical law.",
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Commuting effects in Okun’s Law among British areas : evidence from spatial panel econometrics. / Palombi, Silvia; Perman, Roger; Tavéra , Christophe.

In: Papers in Regional Science, 2015.

Research output: Contribution to journalArticle

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AU - Perman, Roger

AU - Tavéra , Christophe

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AB - This paper examines Okun's Law using a spatial panel approach on NUTS 3 data for Great Britain over the period 1985–2011. The basic specification used as a starting point for the spatial analysis is the relationship between real output growth and unemployment rate changes. This is extended to incorporate spatial lags, to test for the presence of commuting effects, and to accommodate spatial residuals dependence. We estimate various spatial panel models, controlling for heterogeneity across areas, and find consistent evidence of a significant Okun's coefficient. Results also show that spillover effects from labour mobility and interregional linkages matter and have important implications for the validity of the empirical law.

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KW - commuting

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