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Article

Spatial Effects on Youth Unemployment Rate: The Case of Eastern and Western Russian Regions

Eastern European Economics. 2013. Vol. 51. No. 5. P. 94-124.
Demidova O., Marelli E., Signorelli M.

The purpose of this study is to identify the common and different determinants of youth unemployment in Eastern and Western regions of Russia, especially searching for the existence of spatial effects. We tested two main hypotheses. The first hypothesis consists in the existence of a difference between the processes occurring within the Western and Eastern regions and an asymmetry of the processes of influence of Western and Eastern regions on each other. Our second hypothesis is based on the differences in the determinants of youth unemployment in the Eastern and Western parts of Russia. To test these hypotheses, dynamic panel models were estimated by the Arellano–Bond method. These models included four boundary weighted matrices (west-west, east-east, west-east, east-west) and four types of explanatory variables: (i) variables characterising the demographic situation in a region; (ii) variables on the migration processes in a region; (iii) variables characterising the economic situation in a region; and (iv) variables on the export-import activity of a region. Although we were searching for structural determinants of youth unemployment and for spatial effects in East and West Russia, we also investigated the effect of the 2008-09 financial crisis. The main policy implications of the econometric results have been briefly considered in the final section.