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Social capital, industrial districts and regional unemployment in Italy

Birkbeck College, University of London
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  • Management
  • Economics


We consider the industrial districts “conductors” of social capital. Hence, we use the regional density of industrial districts to measure social capital and we analyse its impact on regional unemployment in Italy. By using regional data from the Italian National Statistical Office (ISTAT), we develop a pooled cross-sectional analysis based on the years 2001 and 2005. For a more robust analysis we divide unemployment into two types: general and youth. Interestingly, contrary to the theory of the “strength of position proposition” (Lin 2000), we find that both youth and general unemployment decreases with social capital only within low-educated individuals. In addition, within the low-educated group, empirical evidence shows that the magnitude of the effect of social capital on unemployment increases with the age.

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