nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒11‒05
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Endogenous local labour markets, regional aggregation and agglomeration economies By J. Meekes; W.H.J. Hassink
  2. Decomposing the Returns to Regional Mobility By Fehn, Rebecca; Frings, Hanna
  3. Geography of Skills and Global Inequality By Burzynski, Michal; Deuster, Christoph; Docquier, Frédéric
  4. Is There an Economic Bias in Academic Success? A Regional Perspective By Santos, Eleonora; Khan, Shahed
  5. Agglomeration and the Extent of the Market: An Experimental Investigation into Spatially Coordinated Exchange By Jordan Adamson
  6. Well-being Effects of Self-employment: A Spatial Inquiry By Abreu, Maria; Öner, Özge; Brouwer, Aleid; van Leeuwen, Eveline
  7. Specialization, diversification and environmental technology life-cycle By Nicoló Barbieri; François Perruchas; Davide Consoli
  8. Disentangling link formation and dissolution in spatial networks: An application of a two-mode STERGM to a project-based R&D network in the German Biotechnology industry By Tom Broekel; Marcel Bednarz
  9. Opportunities and Competition in Thick Labor Markets: Evidence from Plant Closures By Haller, Peter; Heuermann, Daniel F.
  10. Local ability to "rewire" and socioeconomic performance: Evidence from US counties before and after the Great Recession By Partridge, Mark D.; Tsvetkova, Alexandra
  11. Do public libraries impact local labor markets? Evidence from Appalachia By B Ferreira Neto, Amir
  12. Digital Innovation Hubs in Smart Specialisation Strategies By Gabriel Rissola; Jens Sorvik

  1. By: J. Meekes; W.H.J. Hassink
    Abstract: In this paper, we examine the structure of workers’ local labour market (LLM) and its economic consequences. We endogenise workers’ LLM to commuting outcomes and worker characteristics. The descriptive results indicate that both male workers and high-educated workers especially are characterised by large LLMs. The empirical results show that the urban wage premium (UWP), explained by the returns to agglomeration in wages, increases by a magnitude of two to three in the level of regional aggregation. We also focus on subgroup differentials in the returns to agglom-eration economies. High-educated workers experience a higher UWP than low-educated workers, but we find no systematic difference between the UWP of men and women when holding the re-gional aggregation level constant. In addition, we examine the returns to agglomeration in wages and employment for workers who experienced job displacement. We show that at a relatively high level of regional aggregation, displaced workers in dense LLMs, compared to displaced workers in more sparse LLMs, experience modest losses in wages and comparable losses in employment.
    Keywords: Local labour markets, Urban wage premium, Employment, Commuting, Regional aggregation, Tra
    Date: 2018
  2. By: Fehn, Rebecca; Frings, Hanna
    Abstract: This paper studies the returns to regional mobility based on a sample of job-to-job transitions in Germany. Additionally, we provide evidence for the selection mechanisms into regional mobility and sorting into firms and matches. Using linked employer-employee data we estimate a wage decomposition including individual, firm and match fixed effects. Our (preliminary) results suggest a wage level increase of 28% for regionally mobile individuals, whereas workers making a job-to-job transition in their local labor market region experience an increase of 24%. Further, workers generally experience a move to higher paying firms, whereas this effect is smallest for regionally mobile workers. In addition, workers find relatively better matches due to the job-to-job transition; with regionally mobile workers benefiting most form this increase in match quality.
    Keywords: regional mobility,wage growth,job-to-job transitions,firm effects,match effects
    JEL: J31 J62 R23
    Date: 2018
  3. By: Burzynski, Michal (LISER); Deuster, Christoph (IRES, Université catholique de Louvain); Docquier, Frédéric (Université catholique de Louvain)
    Abstract: This paper analyzes the factors underlying the evolution of the worldwide distribution of skills and their implications for global inequality. We develop and parameterize a two-sector, two-class, world economy model that endogenizes education and mobility decisions, population growth, and income disparities across and within countries. First, our static experiments reveal that the geography of skills matters for global inequality. Low access to education and sectoral misallocation of skills substantially impact income in poor countries. Second, we produce unified projections of population and income for the 21st century. Assuming the continuation of recent education and migration policies, we predict stable disparities in the world distribution of skills, slow-growing urbanization in developing countries and a rebound in income inequality. These prospects are sensitive to future education costs and to internal mobility frictions, which suggests that policies targeting access to all levels of education and sustainable urban development are vital to reduce demographic pressures and global inequality in the long term.
    Keywords: human capital, migration, urbanization, growth, inequality
    JEL: E24 J24 O15
    Date: 2018–09
  4. By: Santos, Eleonora; Khan, Shahed
    Abstract: This paper aims to evaluate whether schools with better National Exams scores are located in regions NUTs III with greater purchasing power. Accordingly, we analyze the evolution of the ranking of schools in light of the purchasing power of the regions where they are located. Using data collected in the media, related to school rankings by region for 2008 and 2014; and in Pordata database for regional purchasing power in 2007 and 2011; we calculate location and specialization measures and perform a shift-share analysis of the regions. The results indicate that schools located in regions with very high and high purchasing power rank first; and both structural and regional changes were positive. A notable exception is the region of Alto Alentejo with a medium purchasing power. In contrast, regions with low purchasing power showed negative structural and regional changes. These results indicate that, although there may have been an improvement in a region of medium purchasing power, the gap between regions of low and high purchasing power has been perpetuated.
    Keywords: Regional Inequalities,Education Performance,Knowledge-Based Economy,Shift-Share Analysis,Human Capital
    JEL: I21 I24 I25
    Date: 2018
  5. By: Jordan Adamson (Smith Institute for Political Economy and Philosophy, Chapman University)
    Abstract: How and why do agglomerations emerge? While economic historians emphasize trade and economic geographers emphasize variety, we still don’t understand the role of coordination. I ?ll this gap by extending the model of Fudenberg and Ellison (2003) to formalize Smith’s (1776) theory of agglomeration. I then test the model in a laboratory experiment and ?nd individuals tend to coalesce purely to coordinate exchange, with more agglomeration when there is a larger variety of goods in the economy. I also ?nd that tying individuals to the land reduces agglomeration, but magni?es the effect of variety.
    Keywords: Spatial Coordination, Agglomeration, Pure-Exchange
    JEL: R12 C92 F19
    Date: 2018
  6. By: Abreu, Maria (University of Cambridge); Öner, Özge (University of Cambridge, Department of Land Economy); Brouwer, Aleid (University of Groningen); van Leeuwen, Eveline (Urban Economics Group)
    Abstract: Our paper presents an empirical analysis of entrepreneurial well-being using a large-scale longitudinal household survey from the UK that tracks almost 50,000 individuals across seven waves over the period 2009–2017, as well as a number of exploratory case studies. We contribute to the existing literature by investigating how entrepreneurial well-being varies across locations along the urban-rural continuum, and across wealthy-deprived neighbourhoods. We use a Coarsened Exact Matching (CEM) approach to compare the well-being outcomes of individuals who switch into self-employment from waged employment, and show that entrepreneurial well-being, in the form of job satisfaction, is significantly higher for those living in semi-urban locations, relative to those living in urban and rural locations. We argue that semi-urban locations provide an optimal combination of ease of doing business and quality of life. Our results also show that individuals in wealthy neighbourhoods who switch into self-employment experience higher job satisfaction than otherwise comparable individuals living in materially deprived neighbourhoods, although the latter experience greater levels of life satisfaction following the switch.
    Keywords: Entrepreneurship; Well-being; Self-employment; Urban-rural; Neighbourhood effects
    JEL: E24 I13 L26 P25 R20 R23
    Date: 2018–10–30
  7. By: Nicoló Barbieri; François Perruchas; Davide Consoli
    Abstract: The paper analyses whether and to what extent regional related and unrelated variety matter for the development of green technology, and whether their influence differs over the technology life-cycle. Using patent and socio-economic data on a thirty- year (1980-2009) panel of US States, our study finds that unrelated variety is a positive predictor of green innovative activities. When unpacked over the life cycle, we find that unrelated variety is the main driver of green technology development in early stages while related variety becomes more prominent as the technology enters into maturity.
    Keywords: Green technology; Technology life-cycle; Regional Diversification
    JEL: O33 Q55 R11
    Date: 2018–10
  8. By: Tom Broekel; Marcel Bednarz
    Abstract: The analysis of spatial networks' evolution has predominantly concentrated on the formation process of links. However, the evolution of networks is similarly shaped by the dissolution of links, which has thus far received considerably less attention. The paper presents separable temporal exponential random graph models (STERGMs) as a promising method in this context, which allows for the disentangling of both processes. Moreover, the applicability of the method to two-mode network data is demonstrated. We illustrate the use of these models for the R&D collaboration network of the German biotechnology industry as well as for testing for the relevance of different forms of proximities for its evolution. The results reveal proximities varying in their relative importance for link formation and link dissolution.
    Keywords: STERGM, inter-organizational network structure, bipartite, proximity, dissolution, R&D subsidies
    JEL: R11 O31 O38 D83 D85
    Date: 2018–10
  9. By: Haller, Peter; Heuermann, Daniel F.
    Abstract: Since Marshall (1890), it has been widely held in urban economic theory that cities ensure workers against the risk of unemployment by offering a larger pool of potential jobs. Using a large administrative panel data set on workers affected by firm closures, we examine whether positive effects from a higher urban job density are offset by more intense competition between workers. When controlling for the sorting of workers between regions, we find no evidence that the number of days workers spend in unemployment decreases with local job density. Instead, longer unemployment periods in cities are partly driven by more intense competition for available jobs
    Keywords: agglomeration,thick labor markets,displacement
    JEL: J63 J64 R12 R23
    Date: 2018
  10. By: Partridge, Mark D.; Tsvetkova, Alexandra
    Abstract: We examine the effects of three broad groups of socioeconomic factors on poverty, income and employment growth in US counties before and after the Great Recession. The factors reflect different aspects of county economic structure, social/demographic attributes, and natural amenities, as well as position within the urban-rural hierarchy. Our main focus is on the dynamic adjustments within local labor markets, which we approximate with novel measures that capture the ability of a county to rewire by reallocating employees from shrinking to expanding sectors. We use cross-sectional, first-difference and quantile regressions and find that county industrial composition (if it is fast- or slow-growing) and the rewiring ability are of increasing importance. Some of our most policy-relevant findings come from the quantile analysis of differenced job growth. For counties that are lower at the distribution of the response function, the labor-market measures of flexibility emerge as important predictors of growth, suggesting that removing barriers to flow of resources within lagging economies might be a viable policy option.
    Keywords: Regional growth; local labor markets; worker reallocation
    JEL: J62 R11
    Date: 2018–05–09
  11. By: B Ferreira Neto, Amir
    Abstract: This paper investigates the effect of public library programs and participation on unemployment and labor force participation in Appalachia. Appalachia is an economically distressed area, mostly rural, and with a sustained lower level of labor force participation and a higher level of unemployment. As public library programs can be countercyclical to labor market outcomes, I use public library staff and the amount of print resources and computers available as instruments. The results show that neither adult nor children’s programs and participation affect local labor market outcomes. These results are robust across different specifications. Spatial econometric estimates corroborate the main results and provide evidence of spatial spillover effects, especially for children’s programs.
    Keywords: Local Labor Market, Labor Force Participation, Public Library, Unemployment, Appalachia
    JEL: H40 J64 L39 R59
    Date: 2018–10–09
  12. By: Gabriel Rissola (European Commission - JRC); Jens Sorvik
    Abstract: This report examines the synergetic place-based relationships of Digital Innovation Hubs (DIH) and Smart Specialisation Strategies (S3) in selected European regions, with DIHs being the policy outcome of a S3 process or an active actor participating in S3 entrepreneurial discovery processes (EDP) and implementing parts of a S3. By supporting the digitisation of the local industry DIHs also enhance the regional innovation ecosystem, either with the provision of horizontal digitalisation support or by leading a S3 priority area. One clear role of DIHs is to make available support easier to find for local SMEs and industry. DIHs work according to different business models and a targeted funding mix plus a matrix of different funding instruments for the digital transformation of SMEs are required for their sustainability. The report compiles 7 relevant examples (1 national and 6 regional).
    Keywords: Digital Innovation Hubs, DIH, Smart Specialisation Strategies, S3, RIS3, digital growth, digital transformation, digitisation, industry, SME, regional policy, regional cases
    Date: 2018–10

This nep-geo issue is ©2018 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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