Human Capital and Labour Market Resilience: A Regional Analysis for Portugal

Appl Spat Anal Policy. 2022 Jun 2:1-25. doi: 10.1007/s12061-022-09465-z. Online ahead of print.

Abstract

This paper investigates labour market resilience for seven Portuguese NUTS-2 regions over the period 1995-2018 detailing its relationship with levels of education and highlighting the period following the 2007-08 financial and economic crisis. We define resilience as the ability of regional employment to recover from a recessionary shock over an entire business cycle. Our results point to the existence of labour market resilience to the different business cycles for the different regions in terms of total hours worked. The same conclusion applies to employment of workers with different levels of educational attainment, low, medium and high, defined according to the highest level of education completed by employees. Investigating in more detail the potential differentiated impact of the Portuguese Great Recession (PGR), covering the period after the 2007-08 crisis, our findings suggest however no resilience in terms of total hours worked and employment of workers with low levels of education, corresponding so far to a situation of jobless economic recovery. The conclusions are mixed for employment of workers with medium levels of education, while we found evidence of labour market resilience to the PGR for employment of workers with high levels of education. The strong negative impact of the PGR at the economic level thus seems to have hindered labour market resilience for employees and regions less endowed with human capital.

Keywords: Education; Employment; Human Capital; NUTS2; Portugal; Resilience.