Inter-regional and Inter-sectoral Labour Mobility and the Industry Life Cycle: A Panel Data Analysis of Finnish High Technology Sector

Much of the literature on agglomeration emphasises labour mobility between firms as a potential source of externalities. However, while there is a large literature on interregional migration, the empirical literature on the employment-mobility of workers within the local arena is surprisingly thin. Furthermore, there is almost no empirical evidence on the relationship between local and non-local employment movements, especially across industries. In this paper we analyse how agglomeration of the high technology industry as well as regional amenities affects labour mobility. In order to do this we employ panel data on the regional and industrial labour mobility of the Finnish high technology firms and regional economies on a period of 1991–2007. Analysing this dataset allows us to identify the roles which the structure of the high technology sector, regional economic and amenity variables have played both in the inter-regional and inter-sectoral labour mobility of high technology workers over the industry life-cycle. Our findings confirm that the structure of the high technology sector as well as regional economic and amenity variables have an influence on the migration decisions of the high technology workers, and their roles vary in within-region and across-region mobility. In addition, the effects of the variables seem to vary at different stages of the industry life cycle.