Regional Unemployment Rate Convergence in Israel

29/05/2007 |  Presman Natalya, Klepfish Vadim
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Welfare Policy and Labor Market
Regional Unemployment Rate Convergence in Israel
Natalia Presman and Vadim Klepfish
Since the 1990s, many labor market economists have examined the persistent disparities in regional unemployment rates in most economies. In Israel, too, significant and increasing differences between unemployment rates in different regions were documented. This paper implements time-series techniques to test whether quarterly unemployment rates in the six Israeli districts converge. Although the gaps between regional unemployment rates widened in the period under consideration, empirical tests show that all regional unemployment rates converge in the long run, except that in the Southern district. Additional tests on pairs of regions show that the unemployment rates in the majority of pairs converge, most notably in the case of adjacent regions.
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