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Labour Market Mobility and Regional Agglomeration A longitudinal analysis of labour mobility in Sweden 1990-2002. Rikard Eriksson, Urban Lindgren & Gunnar Malmberg Department of Social and Economic Geography Umeå University, Sweden. 1. Rikard.Eriksson@geography.umu.se.

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Labour Market Mobility and Regional AgglomerationA longitudinal analysis of labour mobility in Sweden 1990-2002

Rikard Eriksson, Urban Lindgren & Gunnar Malmberg

Department of Social and Economic Geography

Umeå University, Sweden

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Rikard.Eriksson@geography.umu.se

The significance of labour mobility

  • Essential for regional growth, innovation diffusion and career advancement (BATHELT ET AL 2004; HUDSON 2005; VAN HAM 2001)
  • Allocates embodied human-capital or tacit knowledge (FELDMAN 2000; GERTLER 2003)

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examples

Rikard.Eriksson@geography.umu.se

Examples:
  • Angel (1991) Environment and Planning A Mobility of semiconductors within Silicon Valley contributed to a rapid internal circulation of knowledge.
  • Almeida & Kogut (1999) Management Science Innovations where connected to the career-paths of key-individuals in the semiconductor industry in Silicon Valley.
  • Lawson (1999) Cambridge Journal of Economics Labour mobility between firms enhanced the knowledge creation within the Bio-Tech cluster in Cambridge.
  • Power & Lundmark (2004) Urban Studies Higher degrees of labour mobility within the prospering ICT-cluster in Stockholm than in the rest of Stockholm LLM.

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Rikard.Eriksson@geography.umu.se

Aim

To investigate how individual-, firm- and place-specific attributes affect the propensity for individuals to change job both within and between local labour markets in Sweden (1990-2002)

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Rikard.Eriksson@geography.umu.se

Data and definitions

  • Data: Longitudinal micro-data (1990-2002)
  • Sample: 150 000 individuals each year
    • Age: 25-65
    • Income: ≥ 19 500 € / year
    • No unemployment benefits
    • Working in two consecutive years
  • Regions: 100 Local labour markets (LLM)
  • Intraregional mobility:
    • Unique workplace identifier and workplace coordinates t0 ≠ t1
    • LLM t0 = LLM t1
  • Interregional mobility:
    • Unique workplace identifier and workplace coordinates t0 ≠ t1
    • LLM t0 ≠ LLM t1

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(

(

Local firms in industry

Local firms, all industries

(

(

/

Total firms in industry

Total firms, all industries

Rikard.Eriksson@geography.umu.se

1. Localisation economies

  • External savings from a spatial concentration of similar and related firms (DICKEN & LLOYD 1990; HOOVER 1937)
  • “Pool of labour” & “A constant market for skills” (MARSHALL 1890)

Hypothesis 1: The larger the share of similar and related firms in a region, the higher the probability of intraregional mobility and the smaller the probability of interregional mobility.

LOCALISATION EFFECT (log) =

MALMBERG, MALMBERG & LUNDEQVIST (2000)

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Rikard.Eriksson@geography.umu.se

2. Urbanisation economies

  • External savings due to shared costs in large regions (DICKEN & LLOYD 1990; HOOVER 1937)
  • Enhances efficient job-matching (PECK 1996)
  • Higher productivity and wages both attract and retain labour within the locality (HANSON 2000)

Hypothesis 2: The larger the size of the labour market, the higher the intraregional job mobility and the lower the interregional job mobility.

URBANISATION EFFECT (log) =ll l

Dummies: METROPOLITAN, REGIONAL CENTRE, OTHER LARGE, OTHER SMALL

Total firms (all industries) – localisation economies

MALMBERG, MALMBERG & LUNDEQVIST (2000)

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(

(

Firm employment

Local employment, all industries

(

(

/

National employment in industry

National employment, all industries

MALMBERG, MALMBERG & LUNDEQVIST (2000)

Rikard.Eriksson@geography.umu.se

3. Scale economies

  • Savings from internal specialisation in large firms (DICKEN & LLOYD 1990; HOOVER 1937)
  • A large dominating firm compared to both region and nation with only a few similar jobs outside the firm

Hypothesis 3: The more dominant the firm is in a branch, the smaller the probability of both intraregional and interregional mobility.

SCALE EFFECT (log) =

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Rikard.Eriksson@geography.umu.se

The value of immobility

  • Insider-advantages are accumulated when working at the same place for some time (BECKER 1962; FISCHER ET AL 1998; SIMPSON 1992)
    • Firm-, place- or branch-specific
  • Sunk-costs arises in the case of mobility but are less severe for people with a transferable human capital

Hypothesis 4: People with a long duration of stay in the same workplace have gained a firm-specific knowledge and are more likely to stay in the same workplace, while people with previous experience of job moves have acquired a more transferable human capital and are more likely to change job

DURATION (0-5), MOVES (0-5)

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Rikard.Eriksson@geography.umu.se

Empirical model

  • Random-effects model
  • Two separate regressions (inter- and intraregional)
  • Base: All non-movers

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Rikard.Eriksson@geography.umu.se

Concluding remarks

  • The composition of the regional economy has a significant effect on job mobility
  • The local circulation of tacit knowledge is enhanced in large urban areas and in smaller specialised regions
  • The location-specific conceptualisation of insider-knowledge explains the positive effects of localisation economies
  • Risk: Lock-in effects

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