Mapping Regional Employment Divergences in North–South Europe Through Spatial Models

Being a crucial barometer of labour market stability, employment successfully predicts changes in business cycles, becoming a relevant indicator to policymakers and economists worldwide. The scope of this paper is to investigate the impact of socioeconomic and demographic factors on the employment rate in the European Union through a spatial approach, as well as to compare pre- and post-pandemic characteristics of European labour markets. A persistent North–South divide in employment was observed among the main findings, with Southern regions having lower employment rates and being more vulnerable to the pandemic shocks than Northern regions. Furthermore, the comparison between the spatial econometric models estimated for 2019 and 2022 showed a significant change in the influences of regional employment performance. These discoveries could be of interest to both governments and corporate decision-makers in order to elaborate knowledgeable policies and strategies regarding the labour force.