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Regional Labour Markets

Projection of Regional Labour Markets 2004 (1997- 1998)

Of all indicators for the defintion of policy regions for regional structural aid by Federal and Länder governments to date employment is the only dynamic indicator. However, employment represents only one side of the labour market, the demand for labour by firms. The whole labour market is represented only by the unemployment rate (averaged over several years). The Planning Committee of the Intergovernmental Commission 'Improvement of Regional Economic Structure' therefore decided to take also changes in the regional labour market situation into account when defining the policy regions. Franz-Josef Bade has developed a concept which, in contrast to traditional labour market accounts, is not based on the estimation of the labour force (as the other side of the labour market, the supply of labour). Instead it is based on the regional unemployment rate itself. For each labour market region changes in the unemployment rate are analysed as a function of various factors both on the demand and the supply side and region-specific behavioural patterns are derived. These patterns will be used to forecast future regional unemployment rates constrained by the development of national unemployment.

Contact: Franz-Josef Bade

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