Advertisement

Economia Politica

, Volume 35, Issue 2, pp 313–336 | Cite as

Productivity and employment dynamics: new evidence from Italian regions

  • Bianca Biagi
  • Maria Gabriela Ladu
Article
  • 55 Downloads

Abstract

When productivity growth accelerates job destruction and job creation occur simultaneously. However, what effect this has on the whole economy depends on whether job creation or destruction dominates. We investigate what occurred in Italy from 1977–2003, a time when some labour market reforms were introduced, creating increased flexibility. We also investigate if there were any systematic regional differences in the employment or productivity dynamics and whether these dynamics experienced any sort of spatial externalities. The findings indicate that overall, the effect of job destruction prevailed and that the labour market reforms had a negative impact on employment.

Keywords

Total factor productivity Job creation Job destruction Labor market reforms Spatial externalities 

JEL Classification

J01 J20 O30 R11 R23 

References

  1. Addessi, W. (2014). The productivity effect of permanent and temporary labor contracts in the Italian Manufacturing Sector. Economic Modelling, 36, 666–672.CrossRefGoogle Scholar
  2. Aghion, P., & Howitt, P. (1998). Endogenous growth theory. Cambridge: MIT Press.Google Scholar
  3. Ascari, G., & Di Cosmo, V. (2005). Determinants of total factor productivity in the Italian regions. Scienze Regionali Italian Journal of Regional Science, 4, 27–49.Google Scholar
  4. Baltagi, B. H. (2013). Econometric analysis of panel data (5th ed.). Chichester, UK: Wiley.Google Scholar
  5. Baltagi, B. H., Song, S. H., Jung, B., & Koh, W. (2007). Testing panel data regression models with spatial and serial error correlation. Journal of Econometrics, 140, 5–51.CrossRefGoogle Scholar
  6. Banca d’Italia (2011), Economie Regionali, 23 Nov.Google Scholar
  7. Bean, C., & Pissarides, C. A. (1993). Unemployment, consumption and growth. European Economic Review, 37, 837–854.CrossRefGoogle Scholar
  8. Blanchard, O., & Wolfers, J. (2000). The role of shocks and institutions in the rise of aggregate unemployment. Economic Journal, 110, 1–33.CrossRefGoogle Scholar
  9. Byrne, J. P., Fazio, G., & Piacentino, D. (2009). Total factor productivity convergence among Italian Regions: Some evidence from panel unit root tests. Regional Studies, 43, 63–76.CrossRefGoogle Scholar
  10. Caballero, R. (1993). Comment on Bean and Pissarides. European Economic Review, 37, 855–859.CrossRefGoogle Scholar
  11. Cainelli, G., Fracasso, A., & Vittucci Marzetti, G. (2014). Spatial agglomeration and productivity in Italy: A panel smooth transition regression approach. Papers in Regional Science.  https://doi.org/10.1111/pirs.12103.Google Scholar
  12. Calligaris, S., Del Gatto, M, Hassan, F., Ottaviano, G.I.P., & Schivardi, F. (2017). The productivity puzzle and misallocation: An Italian perspective, CEP Discussion Paper No 1520.Google Scholar
  13. Cingano, F., & Schivardi, F. (2004). Identifying the sources of local productivity growth. Journal of the European Economic Association, 2, 720–742.CrossRefGoogle Scholar
  14. Cirillo, V., Fana, M., & Guarascio, D. (2017). Labour market reforms in Italy: Evaluating the effects of the Jobs Act. Economia Politica.  https://doi.org/10.1007/s40888-017-0058-2.Google Scholar
  15. Combes, P. P. (2000). Economic structure and local growth: France, 1984–1993. Journal of Urban Economics, 47(3), 329–355.CrossRefGoogle Scholar
  16. de la Fuente, A., & Doménech, R. (2000). Human capital in growth regressions: How much difference does data quality make? Economics Department Working Paper no. 262. Paris: OECD.Google Scholar
  17. Easterly, W., & Levine, R. (2001). It’s not factor accumulation: Stylized facts and growth models. World Bank Economic Review, 15, 177–219.CrossRefGoogle Scholar
  18. Elhorst, J. P. (2010). Applied spatial econometrics: Raising the bar. Spatial Economic Analysis, 5, 9–28.CrossRefGoogle Scholar
  19. Fachin, S., & Gavosto, A. (2010). Trends of labour productivity in Italy: A study with panel co-integration methods. International Journal of Manpower, 31, 755–769.CrossRefGoogle Scholar
  20. Gibbons, S., & Overman, H. G. (2012). Mostly pointless spatial econometrics? Journal of Regional Science, 52(2), 172–191.CrossRefGoogle Scholar
  21. Glaeser, E. L., Kallal, H. D., Scheinkman, J. A., & Shleifer, A. (1992). Growth in cities. Journal of Political Economy, 100, 1126–1152.CrossRefGoogle Scholar
  22. Guarascio, D. (2015). Euromemorandum conference—21st conference on alternative economic policy in Europe Italy’s labour market reform: Jobs Act vs. Workers Act.Google Scholar
  23. Hassan, F., & Ottaviano, G. (2013). Productivity in Italy: The great unlearning, Vox CEPR’s Policy Portal, 30 Nov.Google Scholar
  24. Henderson, V., Kuncoro, A., & Turner, M. (1995). Industrial development in cities. Journal of Political Economy, 103, 1067–1090.CrossRefGoogle Scholar
  25. Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit root in heterogeneous panels. Journal of Econometrics, 115, 53–74.CrossRefGoogle Scholar
  26. Ladu, M. G. (2010). Total factor productivity estimates: Some evidence from European regions, WIFO Working Papers, 380.Google Scholar
  27. Ladu, M. G. (2012). The relationship between total factor productivity growth and employment: Some evidence from a sample of European Regions. Empirica, 39, 513–524.CrossRefGoogle Scholar
  28. Lasinio, C. J., & Vallanti, G. (2013). Reforms, labour market functioning and productivity dynamics: A sectoral analysis for Italy, MEF Working Paper Series. MEF Working Paper Series (Vol. 10).Google Scholar
  29. LeSage, J. (2014). What regional scientists need to know about spatial econometrics. The Review of Regional Studies, 44(1), 13–32.Google Scholar
  30. LeSage, J., & Pace, R. K. (2009). Introduction to spatial econometrics. Chapman and Hall/CRC Press, Taylor Francis group.Google Scholar
  31. LeSage, J., & Pace, R. K. (2011). Pitfalls in higher order model extensions of basic spatial regression methodology. The Review of Regional Studies, 41, 13–26.Google Scholar
  32. LeSage, J., & Pace, R. K. (2014). The Biggest Myth in spatial econometrics. Econometrics, 2(4), 217–249.CrossRefGoogle Scholar
  33. Manasse, P., & Manfredi, T. (2014). Wages, productivity, and employment in Italy: Tales from a distorted labour market, Vox CEPR’s Policy Portal, 14 April.Google Scholar
  34. Marrocu, E., & Paci, R. (2012) Education or creativity: What matters most for economic performance? Economic Geography, 88(4), 369–401.CrossRefGoogle Scholar
  35. Marrocu, E., Paci, R., & Pala, R. (2001). Estimation of total factor productivity for regions and sectors in Italy. A panel cointegration approach. Rivista Internazionale di Scienze Economiche e Commerciali, 48, 533–558.Google Scholar
  36. Marrocu, E., Paci, R., & Usai, S. (2012). Productivity growth in the old and new Europe: The role of agglomeration externalities. Journal of Regional Science, 00, 1–25.Google Scholar
  37. Mortensen, D. T., & Pissarides, C. (1998). Technological progress, job creation and job destruction. Review of Economic Dynamics, 1, 733–753.CrossRefGoogle Scholar
  38. Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressor. Oxford Bulletin of Economics and Statistics, 61, 653–679.CrossRefGoogle Scholar
  39. Pissarides, C. (1990). Equilibrium unemployment theory. Oxford: Blackwell.Google Scholar
  40. Pissarides, C. (2000). Equilibrium unemployment theory. Cambridge: MIT Press.Google Scholar
  41. Pissarides, C., & Vallanti, G. (2007). The impact of TFP growth on steady-state unemployment. International Economic Review, 48, 606–640.Google Scholar
  42. Prat, J. (2007). The impact of disembodied technological progress on unemployment. Review of Economic Dynamics, 10, 106–125.CrossRefGoogle Scholar
  43. Svimez (Associazione per lo sviluppo dell'industroa nel Mezzogiorno). (2001). RAPPORTO 2001 SULL’ECONOMIA DEL MEZZOGIORNO, Il Mulino BolognaGoogle Scholar
  44. Sabatino, M. (2016). The deindustrialization process in South Italy. St. Petersburg: ERSA Congress.Google Scholar
  45. Staiger, D., Stock, J. H., & Watson, M. W. (2001). Prices, wages, and the US NAIRU in the 1990s. In A. B. Krueger & R. Solow (Eds.), The roaring nineties: Can full employment be sustained?. New York: The Russell Sage Foundation.Google Scholar
  46. Vega, S. H., & Elhorst, G. P. (2013). Spatial econometric models, spillover effects. In 53rd ERSA conference, Palermo.Google Scholar
  47. Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.Google Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.University of Sassari and CRENoSSassariItaly

Personalised recommendations