Determinants of regional unemployment: some evidence from Austria

Badinger H. and Url T. (2002) Determinants of regional unemployment: some evidence from Austria, Reg. Studies 36, 977–988. Using a spatial filtering technique we estimate an empirical model of regional unemployment for a sample of Austrian regions. The spatial filtering technique removes the spatial correlation from the data and allows us to assess the importance of purely spatial effects. We find significant relations between the regional unemployment rate and relative regional wages transaction costs as reflected by the share of public housing, job vacancies, the share of employees in the manufacturing sector and a social assistance variable. Spatial effects account for about one-fifth of the variation in the unemployment rate.