Short note 03/2011 Regio.c.3(2011) 936361

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Unemployment rates in European Regions, 2010 By Rocco L. Bubbico and Lewis Dijkstra

This short note summarises the regional disparities in unemployment rates across EU-27 NUTS 2 regions in 2010. It also shows the variation in regional unemployment rates between pre-crisis levels (2007) and the latest available data (2010). In 2010, one region in three among the EU-27 has an unemployment rate1 above 10%. In comparison to 2007, the unemployment rate increased in four out of five European regions.

Unemployment rates by Cohesion Policy Objective

High unemployment is a threat to social cohesion leading to poverty and social exclusion and it is one of the most important incentives for people to leave their regions. Convergence regions are faced with high unemployment rates due to low levels of economic activity and skills mismatch due to restructuring and the reduction of employment in agriculture. In 2010, the unemployment rate in these regions is 11.9%, around three percentage points above the pre-crisis levels.

Convergence Transition RCE

Unemployment rate, 2010 11.9 14.8 7.9

Change in unemployment rate, 2007-2010 in percentage points

2.8 6.4 1.8

The Transition regions have an even higher unemployment rate. They were hit particularly hard by the crisis with an increase in unemployment of 6 percentage points between 2007 and 2010. Competitiveness regions have a slightly lower unemployment rate, but we are still confronted with an increase of almost 2 percentage points between 2007 and 2010.

1 Measures the number of people aged 15 and more who are without work but looking for work and available for work, divided by the number of people aged 15 and more and active in the labour market.

Short note 03/2011 Regio.c.3(2011) 936361

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How do the EU regions score in 2010?

The highest rates are registered in regions of France (overseas departments) and Spain. Most of the 26 regions with unemployment rates over 15% can be found in these two, as well as in Slovakia and in the Baltic States. In contrast, 34 regions mainly located in Austria, Germany, northern Italy and the Netherlands have unemployment rates below 5%.

Short note 03/2011 Regio.c.3(2011) 936361

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The impact of the crisis

Unemployment rates increased in 215 out of 271 NUTS 2 regions between 2007 and 2010. In the same time span, a reduction of unemployment was registered in only 49 regions (18% of the total). The regions where unemployment rates decreased the most are, with the exception of Corse, German Landers. Unemployment rates dropped also in some regions of France, Poland, Austria and UK.

Short note 03/2011 Regio.c.3(2011) 936361

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The crisis hit severely in several regions of Spain, Ireland, Baltic States and Greece. As the figure above shows, these regions witnessed a substantial increase in unemployment rates. In most cases, reductions in unemployment rates are correlated with increased levels of GDP per capita and lower levels of poverty. Conversely, regions growing unemployment tend to have lower levels of economic growth and higher levels of poverty.