Vassilis Monastiriotis (p)

Eleonora Cutrini

The study of the geography of (labour market) inequality in the field of economic geography (and related fields) has for long concentrated on aggregate area-level outcomes, concerning mainly wages/remuneration (including returns to skills or education) and employment/unemployment (including under-employment), and comparisons across (groups of) local or regional labour markets. In the spatial economics literature, the focus is more on individual-level outcomes (and drivers of inequality), with emphasis on issues of spatial sorting and agglomeration or spatial equilibration dynamics (MAR externalities, transport costs, congestion diseconomies, etc). In this paper we focus at the meso-level of jobs (defined as fine occupational classes within sectors of economic activity) to examine (a) how the geography of wage inequality varies across tasks (and, inversely, how occupational pay inequality varies across space) and (b) how this has been affected over time by two major sets of ‘disruptions’ related to the processes of automation and digitalisation (as these have been accelerated by the COVID pandemic): ones relating to the functional organisation of production [shifts in the content (tasks), industrial organisation (flexibilisation) and relative importance (occupational hierarchies) of jobs]; and ones relating to the spatial organisation of production [with new forms of remote work and tele-working altering the importance of location, agglomeration and spatial proximity, potentially reconfiguring the geography of employment at various scales (urban-suburban, regional / core-periphery, national, global)].

Eleonora Cococcia (p), Alessandra Faggian, Marco Modica

Vassilis Monastiriotis

Very few studies, to the best of our knowledge, have explored the empirical link between inequality and resilience. In details, in this paper we move from the assumption that inequality may exacerbate the effect of economic downturns, therefore we focus on the effect of the financial crisis of 2008 on Italy, as one of the countries with higher inequality levels among European Union Member States. In this work, we deal with the very well-known resistance and the recovery indices of the area built upon employment growth paths. Furthermore, we also build an ad-hoc measure of inequality at the Labor Market Areas during the period 2007-2012. This geographical scale is particularly functional to analyze the relationship between income inequality and resilience to economic shocks of Italy because it is based on commuting flows. Indeed, most of the studies on resilience use administrative boundaries to measure the resilience of an economic system, but in analysis on economic resilience the level of disaggregation should be based on functional areas, especially when using labor market-related variables, such as employment. We estimate the effect of inequality, using the Gini coefficient from individuals’ tax declarations, in both resistance and recovery phases, controlling for a wide list of potential determinants of resilience, such as population size, industrial diversification, education level, population age, urbanization, and regional fixed effects. Specifically, in our analysis 2009–2010 is the resistance phase, the pre-recessionary period is 2007–2008, and the recovery periods are 2011, in the short-run, and 2016 in the long.-run. Our paper contributes to corroborate the idea that high levels of inequality represent a threat to employment resilience.

Hiromi Yumoto (p), Matt Cole, Liza Jabbour, Ceren Ozgen

Eleonora Cococcia

The concern about refugee integration in the European labour market has been growing following increasing asylum applications in recent years. However, the labour market effects of government interventions to cultivate the local language and respect the rules and norms of host societies, remain largely unassessed. To address the need for causal evidence of these interventions, this study investigates whether civic integration exams promote the economic integration of refugees in the Netherlands, where refugees are obliged to take a set of complex exams, including a component about the Dutch labour market called the ONA. Taking advantage of the exogenous introduction of the ONA, and mitigating endogeneity concerns by generating comparable treated and untreated groups, we compare economic outcomes driven by the new exam containing the ONA with the previous exam. Using rich Dutch administrative data for the period from 2014 to 2020 and applying a Propensity Score Matching - Difference in Differences framework, we assess whether and to what extent the ONA boosts the refugees' labour market performance, in terms of employment probability, hours worked and hourly wages. Our results indicate that passing the ONA leads to a higher employment probability by 2.6 percentage points in comparison to those who passed the exam without ONA. Five quarters after the exam, the additional employment probability, driven by ONA, reaches 3.7 percentage points. Yet, our results provide no evidence of a significant impact of ONA on hours worked and hourly wages. In other words, the newly introduced exam helps the likelihood but has no effects on the quantity and quality of jobs. Our results also reveal that the ONA particularly boosts the employment likelihood of refugees from Syria and females by 3.9 percentage points and 2.1 percentage points, respectively.

Putu Angga Widyastaman (p), Djoni Hartono

Hiromi Yumoto

Indonesia has a serious crime issue. Since there are evidences that economic inequality may cause crime incidences, several studies have been conducted to verify the relationship. However, very few of these studies took geographical pattern and spatial linkages between crime and its determinants, particularly inequality, into account. To provide a better understanding of the spatial distribution of economic inequality and crime and the relationship between the two variables in Indonesia, this paper examines the geographical pattern of economic inequality and crime as well as local and spillover effects of within and across-districts/cities inequality on crime rate. Using data of 483 Indonesian districts/cities from 2010 to 2020, this study employed local indicators of spatial association (LISA) analysis to examine geographical patterns between economic inequality and crime and panel spatial Durbin model to investigate the spatial effects, including local and spillover effects, of economic inequality on property and other types of crime rate. LISA analysis yielded geographic-based information regarding clusters of economic inequality and crime, thus provided an insight on the spatial pattern of those variables. To understand the relationship between economic inequality components and crime further, panel spatial Durbin results has shown that using property crime rate as the dependent variable, strong positive local and spillover effect of within-region and across-region economic inequality on crime rates was observed. When other types of crime used as dependent variable, economic inequality components also showed significant positive effect, except for within-districts/cities economic inequality component from the neighboring region, which showed weak spillover effects on other types of crime rates.

Eleonora Cutrini (p), Carlos Mendez

Putu Angga Widyastaman

This paper studies regional income convergence and its conditioning factors across 267 subnational regions of the European Union over the 2003-2016 period. Building on previous research that documents the formation of multiple convergence clubs in per-capita income, we study the role of structural change and spatial dependence as key conditioning factors explaining club convergence. Our results are three-fold. First, we document that the spatial distribution of the convergence clubs shows a strong degree of spatial dependence. Second, we study the evolution of structural change and spatial dependence. Our results show that the share of manufacturing has been decreasing while its degree of spatial dependence has been increasing over time. In contrast, the share of knowledge-intensive services has been increasing while its degree of spatial dependence has been decreasing. Third, we evaluate the role of structural change and spatial dependence in the formation of convergence clubs using a spatial ordered-logit model. Our results show that when spatial dependence is omitted from the econometric specification, manufacturing and knowledge-intensive services are not significant predictors of club convergence. Only when spatial dependence is added to the specification, most structural change variables become statistically significant. Moreover, there are contrasting spatial effects across structural change variables. On the one hand, geographical spillover effects for manufacturing and routine services are statistically significant. On the other hand, knowledge-intensive services do not show significant spillover effects. Overall, our results highlight the joint importance of structural change and spatial dependence in the formation of convergence clubs. Specifically, the notion of spatial structural change deserves further attention as it appears to play a major role in the evolution of regional disparities in the European Union.