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The third stage of European Economic and Monetary Union (EMU) was implemented in January 1999 against the specter of persistently high unemployment in many of the participating countries. While the high European unemployment has received considerable attention, this new IMF staff study analyzes an equally important issue: the extent of regional unemployment disparities in certain countries. The paper focuses on large and persistent differences in regional unemployment rates within several European countries. The paper includes detailed case studies of two euro area countries where regional disparities in unemployment are striking- Italy and Spain. The studies emphasize that wages are unresponsive to local labor market conditions.

Labour market --- Europe --- Unemployment --- Regional disparities --- -Unemployment --- -331.56 <4> --- werkloosheid --- regionaal economisch beleid --- europa --- EEC / European Union - EU -Europese Unie - Union Européenne - UE --- US / United States of America - USA - Verenigde Staten - Etats Unis --- 305.94 --- 332.691 --- 306.13 --- 338.43 --- 307.21 --- 332.620 --- 330.05 --- 331.13794 --- Joblessness --- Employment (Economic theory) --- Full employment policies --- Labor supply --- Manpower policy --- Right to labor --- Underemployment --- Werkloosheid. Arbeidsreserve--Europa --- chomage --- politique economique regionale --- europe --- Econometrie van de arbeidsmarkt, de werkgelegenheid en de werkloosheid. --- Evolutie van de arbeidsmarkt. --- Indexcijfers van de werkgelegenheid en van de werkloosheid. --- Regionaal beleid. Industriële ontwikkeling en omschakeling van bepaalde regio's. Nieuwe industrieën. --- Statistieken van de werkgelegenheid en werkloosheid. --- Werkloosheid: algemeenheden. Philipscurve. --- Working papers --- Regional disparities. --- 331.56 <4> Werkloosheid. Arbeidsreserve--Europa --- 331.56 <4> --- Econometrie van de arbeidsmarkt, de werkgelegenheid en de werkloosheid --- Indexcijfers van de werkgelegenheid en van de werkloosheid --- Statistieken van de werkgelegenheid en werkloosheid --- Werkloosheid: algemeenheden. Philipscurve --- Evolutie van de arbeidsmarkt --- Regionaal beleid. Industriële ontwikkeling en omschakeling van bepaalde regio's. Nieuwe industrieën --- Unemployment - OECD countries - Regional disparities --- Unemployment - Europe - Regional disparities --- Labor --- Macroeconomics --- Unemployment: Models, Duration, Incidence, and Job Search --- Wages, Compensation, and Labor Costs: General --- Demand and Supply of Labor: General --- Employment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Labor Force and Employment, Size, and Structure --- Labour --- income economics --- Unemployment rate --- Labor markets --- Labor market --- Economic theory --- Labor costs --- Italy