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Industrial diversity and metropolitan unemployment rate

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Abstract

The main goal of our study is to evaluate whether or not industrial diversity helps reduce the frictional unemployment rate of a metropolitan area. We used a data set from Japan’s 118 metropolitan areas. Our analysis shows that although industrial diversity might reduce the frictional unemployment rate of a metropolitan area, its effect is not statistically significant in our model. Second, the location quotient for industries, considered to be related to types of unemployment other than frictional, has a stronger impact on unemployment rate than industrial diversity does. In particular, it was found that the location quotients for both the manufacturing and the construction industry have a negative relationship with the unemployment rate of a metropolitan area. We also discovered that the higher the percentage of graduates of post-secondary institutions there are in a metropolitan area, the lower its unemployment rate will be.

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Notes

  1. As for this point, see for example Koike(1981).

  2. Okinawa’s situation is not the same as for other prefectures. Okinawa is located about 700 km southeast of Kyushu, one of Japan’s main islands. At the end of World War II, Okinawa remained under U.S. occupation and was not returned to Japan until May of 1972, as stipulated in the Agreement between Japan and the United States of America concerning the Ryukyu Islands and the Daito Islands. Although Okinawa is only one of Japan’s prefectures, most U.S. military bases are located there, resulting in political factors which may be related to Okinawa’s exceptionally high unemployment rate.

  3. See, for example, Mizuno (1992).

  4. We also calculate the different variable of higher education ratio, which is defined as the percentage of the higher education graduates in the labor force of a metropolitan area, by dividing the number of higher education graduates that enter a labor force by the total population of over 15-year olds in a metropolitan area.

  5. See, for example, Greene (2000, p.510).

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Author information

Authors and Affiliations

  1. School of Business Administration, Kwansei Gakuin University, 1-1-155 Uegahara, Nishinomiya, 662–8501, Japan

    Keizo Mizuno

  2. Graduate School of Business Administration, Kobe University, 2-1 Rokkodai, Nada-ku, Kobe, 657–8501, Japan

    Fumitoshi Mizutani

  3. Graduate School of Economics, Nagoya City University, 1 Mizuho-cho Aza Yamanohata, Mizuho-ku, Nagoya, 467–8501, Japan

    Noriyoshi Nakayama

Authors
  1. Keizo Mizuno
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  2. Fumitoshi Mizutani
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  3. Noriyoshi Nakayama
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Corresponding author

Correspondence to Fumitoshi Mizutani.

Additional information

This study was accomplished within the organization of the Urban Revitalization of Kansai Region in FY2002, sponsored by Nihon Keizai Shinbun. An earlier version of this paper was presented at the 43rd Congress of the European Regional Science Association, 27–30 August, 2003, University of Jyvaskyla, Finland. We would like to thank both the project members and participants at the congress for their discussion and comments on the earlier version. We would especially like to thank Hitoshi Akiyama (UFJ Research Institute), Kyoichi Futagami (Osaka University), Takenori Inoki (International Japanese Culture Research Center), Yoshiaki Shikano (Doshisya University) and Michihiko Tachi (Nihon Keizai Shinbun). Part of this study was financially supported by the 21st Century COE program (the Ministry of Education, Culture, Sports, Science and Technology) of the Kobe University, Graduate School of Business Administration.

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Mizuno, K., Mizutani, F. & Nakayama, N. Industrial diversity and metropolitan unemployment rate. Ann Reg Sci 40, 157–172 (2006). https://doi.org/10.1007/s00168-005-0046-2

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