Cantonal and Regional Unemployment in Switzerland: A Dynamic Macroeconomic Panel Analysis

In this paper, factors explaining the regional disparity of unemployment in Switzerland at the level of the Swiss states (cantons) and labor market regions over time are examined. We estimate a dynamic panel using particularly suited estimation techniques in order to find out to what extent existing estimation results are robust to the econometric specification. We find that particularly high tax burdens increase cantonal unemployment, the number of foreign workers is positively correlated with unemployment and human capital investment reduces unemployment.