Okun's Law in the French Regions: A Cross-Regional Comparison

Marie-Estelle Binet (1) , François Facchini (2)

1 CREM - Centre de recherche en économie et management
2 CES - Centre d'économie de la Sorbonne

This article tackles one central issue in the regional science literature: the persistence of regional disparities in unemployment within national economies. Our approach is original as Okun's coefficients are estimated for each of the 22 administrative French regions over the period 1990-2008, taking into account cross-regional disparities in a panel data specification. Estimates show that the coefficients exhibit regional differences. Indeed, Okun's law is confirmed in fourteen regions, although it does not hold in the other eight regions. Finally, region-specific factors that explain the results that are not significant are identified, and policies to reduce unemployment in French regions are examined.

Mots clés: Okun's law; panel data; French regions; spatial heterogeneity

Domaines: Economies et finances

Marie-Estelle Binet, François Facchini. Okun's Law in the French Regions: A Cross-Regional Comparison. Economics Bulletin, 2013, 33 (1), pp.420-433. ⟨halshs-00812549v2⟩