REGIONAL EMPLOYMENT PATTERNS IN A GLOBALIZING WORLD: A TALE OF FOUR ITALIES Luca Cherubini (Banca d Italia, Firenze) Bart Los (University of Groningen) Final WIOD Conference Causes and Consequences of Globalization, Groningen, April 24-26, 2012
Four Macro-regions NE NW S C
Different Specialization Patterns NW-1995 NE-1995 C-1995 S-1995 Blue: Agriculture + Mining; Red: Manufacturing; Green: Services (incl. Construction) NW-2006 NE-2006 C-2006 S-2006 Percentages of jobs, in total employment (including self-employed, data from Istat LFS, reconciled with EU KLEMS totals for Italy)
Different Regional Employment Patterns Regional Shares in High-Skilled Jobs Share of High-Skilled Jobs in Total Jobs 0.33 0.20 0.30 0.27 0.24 1995 2001 0.15 0.10 1995 2001 0.21 0.18 2006 0.05 2006 0.15 NW NE C S 0.00 NW NE C S Overall employment growth (1995-2006): NW: 13.9% C: 16.8% NE: 16.1% S: 10.0% Unemployment Rates (2006): NW: 5.7% C: 8.1% NE: 5.2% S: 15.2%
The Importance of Value Chains In a world that is increasingly characterized by interregional and international production networks (spatial decoupling of production stages), embeddedness in prospering international or interregional value chains is essential for regions (e.g., Humphrey & Schmitz, RegStud, 2002) Research question: To what extent can Italian interregional differences in employment change be attributed to differences in embeddedness in value chains, and changes therein? Approach: Global Value Chain approach advocated by Timmer et al. (2012) in WIOD-project Data material needed: international input-output tables, with detailed information for production structure of regions and trade patterns among regions and between regions and foreign countries Employment data by industry
Building a multiregional SUT for Italy Italian sub-national SUTs are not produced by Istat. Tuscany s research institute Irpet produces regional (NUTS2) SUTs. The multiregional SUTs (MRSUT) for the 4 macro regions (NUTS1) originates from an iterative balancing procedure (SCM) reconciling 20 regional SUTs with a interregional trade flows matrix, given a set of initial data and several constraints (Casini Benvenuti & Paniccià, 2003). The estimation of the interregional trade flows a key for the building of any MRSUT is carried out through a gravity model using an ad hoc survey sampling data. While regional exports to other countries can be exactly attributed to the region of origin, regional imports from abroad are distributed among regions according to the local industry mix (at a macro regional level the issue should be less severe).
Integrating the MRSUT into WIOD Main adjustments needed to conform the Italian MRSUT to WIOD standards: Reconciliation of industry classification (35 instead of 30); Interregional imports and imports from abroad divided into use categories and region/country of origin (in proportion to the BEC-based attribution for Italy in WIOD); International Transport Margins estimates distributed among regions (Interregional Transport Margins supposed null); Estimates of purchases abroad by residents in region and purchases on the regional territory by non-residents in region.
Method Value chains are characterized by country-industry (and region-industry) that produces the final product. Example: ITA-S contributes low-skilled labor in agriculture, that is required to satisfy worldwide consumption demand for German food products. From ITA_WIOT : worldwide final demand vector c and gross output levels x From ITA_WIOT : 1505x1505 Leontief-inverse L From ISTAT: employment (jobs) by regional industry by skill emp s gvcemp s = diag(emp s /x) * L * diag(c) gvcemp s : 1505x1505 matrix with employment in row industry due to final demand for column industry
Most Important Value Chains (LS-1995) NW NE C S NE Machinery NW Food S Construction NW Food etc. S Construction S Construction NW Food etc. NE Food etc. NE Food etc. S Food etc. NE Food etc. C Food etc. NE Construction NW Machinery S Food etc. NE Hotels etc. S Food etc. NW Construction NE - Construction NW Hotels etc. DEU Transp Eq DEU Construction DEU Construction DEU Food etc. FRA Transp Eq DEU Food etc. USA - Public Admin DEU Transp Eq DEU Construction DEU Transp Eq DEU Transp Eq FRA Food etc. FRA Construction FRA Construction USA Construction DEU Construction DEU - Machinery FRA - Transport FRA Transp Eq FRA Transp Eq
Jobs contributed to Value Chains 600000 500000 400000 300000 200000 100000 ls-1-inter ms-1-inter hs-1-inter ls-1-foreign ms-1-foreign hs-1-foreign LS-foreign/LS-value chains 0.32 0.34 0.37 0 S NW 700000 600000 500000 ls-1-inter LS-foreign/LS-value chains 400000 300000 ms-1-inter hs-1-inter ls-1-foreign 0.15 0.17 0.18 200000 100000 0 ms-1-foreign hs-1-foreign
External Dependency (LS, Total Econ) NW LS-foreign/LS-value chains 0.32 0.34 0.37 LS-value chains/ls-total 0.22 0.21 0.20 S LS-foreign/LS-value chains 0.15 0.17 0.18 LS-value chains/ls-total 0.21 0.20 0.18 External dependency levels for regions are similar and declining, but S is much more susceptible to deteriorations in the national economic environment
Future Work Most important issues: More systematic analysis and presentation of results Split between workers in primary industries, manufacturing and services