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The Sources of Taiwan's Regional Unemployment : A Cross-Region Panel Analysis

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  • Chuang, Yih-Chyi
  • Lai, Wei-Wen

Abstract

In recent years under the trendof a global recession andd omestic structural change, the unemployment rate in Taiwan has reacheda recordhigh of above 5% which in turn has generateda series of social problems. Unemployment has now become the core issue in the government's agenda. From historical regional data, we findthat there are distinct variations of the unemployment rate among 23 cities andprefectures; moreover, this differentiation seems to persist over time. We analyze this regional unemployment trendby equilibrium and disequilibrium factors controlling for the macro environment using 23 cities' andprefectures' cross section and time series data pertaining to the 1995 to 2004 period. A cross-region panel study shows that the major factors that explain the persistent but divergent regional unemployment rates (aside from the aggregate macro environment which explains about one quarter) are demographic composition, family characteristics, industrial structure, population density, migration costs, and labor mobility. Understanding the sources of regional unemployment will help us to determine the appropriate policies to mitigate the unemployment rate across regions.

Suggested Citation

  • Chuang, Yih-Chyi & Lai, Wei-Wen, 2008. "The Sources of Taiwan's Regional Unemployment : A Cross-Region Panel Analysis," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 49(2), pages 47-65, December.
    • Handle: RePEc:hit:hitjec:v:49:y:2008:i:2:p:47-65
    DOI: 10.15057/16515
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    Cited by:

    1. Iulian CONDRATOV, 2017. "The Relation Between Tourism And Unemployment: A Panel Data Approach," Revista de turism - studii si cercetari in turism / Journal of tourism - studies and research in tourism, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 23(23), pages 1-1, June.
    2. Shu‐hen Chiang, 2012. "The sources of metropolitan unemployment fluctuations in the Greater Taipei metropolitan area," Papers in Regional Science, Wiley Blackwell, vol. 91(4), pages 775-793, November.
    3. Iulian Alexandru CONDRATOV, 2017. "A Cross-Region Panel Analysis Of The Unemployment In Romania," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 6(2), pages 1-26, July.

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    More about this item

    Keywords

    Unemployment Rate; Demographic Composition; Compensating Wage Differentials; Urbanization; Labor Mobility; Migration;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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