Geographical distribution of unemployment in Italy. An Analysis of provincial differences in Italy

Unemployment rates appear to vary widely at a subregional (e.g., local or provincial)level. Using spatial econometric models for spatial autocorrelation, this paper focuses attentionon the spatial structure of regional unemployment disparities of Italian provinces. On the basisof findings from the economic literature and of the available socio-economic data, various modelspecifications, including different explanatory variables, are tested to investigate the geographicaldistribution of unemployment in the 103 provinces of Italy for the years 1998 and 2003. The resultssuggest that there is a clear explanation of unemployment differentials in terms of spatial equilibriumand disequilibrium factors and a significant degree of spatial dependence among labourmarkets at the provincial level in Italy. Provinces marked by high unemployment, as well as thosecharacterised by low unemployment, tend to be spatially clustered, demonstrating the presence ofunemployment “persistency” in space and time regimes.