A nonparametric analysis of regional unemployment dynamics in Britain

This article estimates the probability distribution of relative county unem ployment in Britain for the years 1981-1995. We find that the distribution is unimodal in all years, with a falling variance between 1989 and 1994. We use bootstrap methods to determine critical values for the two tails of th e distribution and analyze intradistribution dynamics. We calculate transit ion probabilities and find that the probability of leaving any given state is very low. We also find that high (low) unemployment regions have a highe r probability of entering a state of lower(higher) unemployment than a star e of higher (lower) unemployment.