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Agglomeration Effects on Employer-Provided Training: Evidence from the UK

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  • Giorgio Brunello
  • Francesca Gambarotto

Abstract

Recent empirical evidence suggests that the density of local economic activity – measured as the number of employees per squared kilometer – positively affects local average productivity. In this paper we use British data from the European Community Household Panel to ask whether local density affects employer-provided training. We find that training is less frequent in economically denser areas. We explain this result as the outcome of the interaction between the positive pooling effects and negative poaching and turnover effects of agglomeration. The size of the negative effect of density is not negligible: when evaluated at the average firm size in the local area, a 10 percent increase in density reduces the probability of employer-provided training by 0.07, more than 20 percent of the average incidence of training in the UK during the sample period.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2004/wp-cesifo-2004-03/cesifo1_wp1150.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1150.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1150

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Keywords: training; spatial economics; Britain;

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References

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  1. Bassanini, Andrea & Brunello, Giorgio, 2003. "Is Training More Frequent When Wage Compression is Higher? Evidence from the European Community Household Panel," IZA Discussion Papers 839, Institute for the Study of Labor (IZA).
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  3. Zenou, Yves, 2003. "Urban Labour Economic Theory," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4029, C.E.P.R. Discussion Papers.
  4. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
  5. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," ISER Working Paper Series 2003-23, Institute for Social and Economic Research.
  6. Combes, Pierre-Philippe & Duranton, Gilles, 2006. "Labour pooling, labour poaching, and spatial clustering," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 36(1), pages 1-28, January.
  7. Yatchew, Adonis & Griliches, Zvi, 1985. "Specification Error in Probit Models," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 134-39, February.
  8. Federico Cingano & Fabiano Schivardi, 2003. "Identifying the Sources of Local Productivity Growth," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 474, Bank of Italy, Economic Research and International Relations Area.
  9. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  10. J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992. "Industrial Development in Cities," NBER Working Papers 4178, National Bureau of Economic Research, Inc.
  11. Andres Almazan & Adolfo de Motta & Sheridan Titman, 2003. "Firm Location and the Creation and Utilization of Human Capital," NBER Working Papers 10106, National Bureau of Economic Research, Inc.
  12. Brunello, Giorgio & Medio, Alfredo, 2000. "An Explanation of International Differences in Education and Workplace Training," IZA Discussion Papers 114, Institute for the Study of Labor (IZA).
  13. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  14. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  15. Booth, Alison L & Francesconi, Marco & Zoega, Gylfi, 1999. "Training, Rent-Sharing and Unions," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2200, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. Samuel Muehlemann & Stefan C. Wolter, 2006. "Regional Effects on Employer Provided Training: Evidence from Apprenticeship Training in Switzerland," CESifo Working Paper Series, CESifo Group Munich 1665, CESifo Group Munich.
  2. Diez-Vial, Isabel, 2011. "Geographical cluster and performance: The case of Iberian ham," Food Policy, Elsevier, Elsevier, vol. 36(4), pages 517-525, August.
  3. Bassanini, Andrea & Booth, Alison L. & Brunello, Giorgio & De Paola, Maria & Leuven, Edwin, 2005. "Workplace Training in Europe," IZA Discussion Papers 1640, Institute for the Study of Labor (IZA).
  4. Giorgio Brunello, 2006. "Workplace Training and Labour Market Institutions in Europe," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 4(4), pages 33-41, 02.
  5. Uschi Backes-Gellner & Johannes Mure, 2005. "The Skill-Weights Approach on Firm Specific Human Capital: Empirical Results for Germany," Working Papers, University of Zurich, Institute for Strategy and Business Economics (ISU) 0056, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Apr 2005.
  6. Naoki Shintoyo, 2008. "Creation of jobs and firm-sponsored training in a matching model of unemployment," Journal of Economics, Springer, Springer, vol. 93(2), pages 145-176, March.
  7. Ardiana N. Gashi & Geoff Pugh & Nick Adnett, 2010. "Technological change and employer-provided training: evidence from UK workplaces," International Journal of Manpower, Emerald Group Publishing, Emerald Group Publishing, vol. 31(4), pages 426-448, July.
  8. repec:iab:iabzaf:v:40:i:2/3:p:135-147 is not listed on IDEAS
  9. Beblavý, Miroslav & Thum, Anna-Elisabeth & Potjagailo, Galina, 2013. "When do adults learn? A cohort analysis of adult education in Europe," CEPS Papers, Centre for European Policy Studies 8059, Centre for European Policy Studies.
  10. Giorgio Brunello & Maria De Paola, 2004. "Market Failures and the Under-Provision of Training," CESifo Working Paper Series, CESifo Group Munich 1286, CESifo Group Munich.

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