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Regional unemployment
Unemployment rates vary significantly among OECD countries but large international differences hide even larger differences among regions. In 2003, regional differences in unemployment rates were above 10 percentage points in more than one third of OECD countries.
Definition
Unemployed persons are defined as those who report that they are without work, that they are available for work and that they have taken active steps to find work in the last four weeks. The ILO Guidelines specify what actions count as active steps to find work and these include answering vacancy notices, visiting factories, construction sites and other places of work, and placing advertisements in the press as well as registering with labour offices.
The unemployment rate is defined as the number of unemployed persons as a percentage of the labour force, where the latter consists of unemployed and employed persons.
When unemployment is high, some persons become discouraged and stop looking for work. They are then excluded from the labour force so that the unemployment rate may fall, or stop rising, even though there has been no underlying improvement in the labour market.
The Gini index offers a more precise picture of regional disparities. It looks not only at the regions with the highest and the lowest GDP per capita but also at the differences among all regions. The index ranges between 0 and 1: the higher its value, the larger the regional disparities. Regional disparities tend to be underestimated when the size of regions is large.
Comparability
As for the other regional statistics, the comparability of unemployment rates is affected by differences in the meaning of the word region (see Regional population) and the different geography of rural and urban communities (see Regional GDP), both within and among countries.
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Overview In 2003, Italy was the country with the largest disparity in unemployment rates with a Gini index equal to 0.43. According to this index, regional disparities were also large in Iceland, Canada, Belgium, Germany and Spain. In most other countries, regional disparities were close to the OECD average (0.18). Only in the Netherlands Japan and Ireland did unemployment rates reflect a more even regional pattern. The percentages of the labour force located in regions where unemployment rates are above the national average reveal the share of the national workforce that is affected by regional disparities in unemployment rates. In 2003, 49% of the OECD labour force was based in regions with unemployment rates above the national rate. Significant international differences in unemployment rates hide even larger differences among regions. In Italy, Poland, Germany and Spain differences in regional unemployment rates were greater than 20 percentage points. In Canada, the Slovak Republic, Finland, Turkey, Belgium and the Czech Republic these differences were smaller but still large (above 10 percentage points). Only in Mexico, the Netherlands, Korea, and Ireland, did unemployment rates reflect a more even regional pattern. |
Source
- OECD (2007), OECD Regions at a Glance, OECD, Paris.
Further information
Analytical publications
- OECD (2001), OECD Territorial Outlook, 2001 Edition, OECD, Paris.
- OECD (2003), Geographic Concentration and Territorial Disparity in OECD Countries, OECD, Paris.
- OECD (2005), Local Governance and the Drivers of Growth, OECD, Paris.
- Spiezia, V. (2003), OECD Statistics Brief, OECD, Paris.
Websites
- OECD Regional Database, www.oecd.org/gov/territorialindicators.
Variation of regional unemployment rates
Gini Index of Regional disparities in unemployment rates
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