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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
Date of revision:
Handle: RePEc:ces:ceswps:_1150

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Keywords: training; spatial economics; Britain;

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References

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  1. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 346-360, 04/05.
  2. Brunello, Giorgio & Medio, Alfredo, 2001. "An explanation of international differences in education and workplace training," European Economic Review, Elsevier, vol. 45(2), pages 307-322, February.
  3. 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.
  4. Federico Cingano & Fabiano Schivardi, 2003. "Identifying the Sources of Local Productivity Growth," Temi di discussione (Economic working papers) 474, Bank of Italy, Economic Research and International Relations Area.
  5. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-90, October.
  6. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
  7. 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).
  8. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  9. 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.
  10. Booth, Alison L & Francesconi, Marco & Zoega, Gylfi, 1999. "Training, Rent-Sharing and Unions," CEPR Discussion Papers 2200, C.E.P.R. Discussion Papers.
  11. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  12. 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.
  13. Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor pooling, labor poaching and spatial clustering," LSE Research Online Documents on Economics 20103, London School of Economics and Political Science, LSE Library.
  14. repec:iza:izadps:dp is not listed on IDEAS
  15. Zenou, Yves, 2003. "Urban Labour Economic Theory," CEPR Discussion Papers 4029, C.E.P.R. Discussion Papers.
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Citations

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

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