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Job Categories and Geographic Identity: A Category Stereotype Explanation for Occupational Agglomeration

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  • Leung, Ming D.
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    Abstract

    I examine the phenomenon of occupational agglomeration – the observation that workers with similar skills tend to co-locate geographically. Extant explanations point to the fact that industries also tend to agglomerate – thereby creating a need for a particular type of employee to locate there. However, labor markets can pool even when propinquity to employers is not beneficial. I argue that particular types of work become associated with specific geographical locations. This association becomes a categorical stereotype – which leads employers to prefer employees from particular geographic regions because they will seem more appropriate – a form of “spatial signaling.†I test this theory in an online, virtual marketplace for freelancing services. I find that the greater the association between a particular job category and a country – what I termjob specific geographic identity– the more likelyanyfreelancer from that country will win a job in that category. I also find this effect is stronger when a freelancer has no previous relevant experience but a bad experience by a buyer (at this job/country intersection) can eliminate this positive effect. This effect holds net of other explanations such as spatial mismatch, knowledge spillovers, and input cost advantages.

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    Bibliographic Info

    Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt31b4c6p8.

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    Date of creation: 01 Jun 2012
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    Handle: RePEc:cdl:indrel:qt31b4c6p8

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    Related research

    Keywords: Business; Social and Behavioral Sciences; Occupational Agglomeration; Job Categories; Space; Labor Markets;

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    1. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
    2. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Harvard Business School Working Papers 07-064, Harvard Business School.
    3. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
    4. Todd M. Gabe & Jaison R. Abel, 2009. "Labor market pooling and occupational agglomeration," Staff Reports 392, Federal Reserve Bank of New York.
    5. Michael S. Dahl & Olav Sorenson, 2012. "Home Sweet Home: Entrepreneurs' Location Choices and the Performance of Their Ventures," Management Science, INFORMS, vol. 58(6), pages 1059-1071, June.
    6. Diamond, Charles A & Simon, Curtis J, 1990. "Industrial Specialization and the Returns to Labor," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 175-201, April.
    7. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
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