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Job Matching Efficiency in Skilled Regions - Evidence on the Microeconomic Foundations of Human Capital Externalities

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  • Daniel F. Heuermann

    ()
    (Institute for Labour Law and Industrial Relations in the EC, University of Trier)

Abstract

Inspired by the literature on the role of local career networks for the quality of labor market matches we investigate whether human capital externalities arise from a higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany we find that an increase in the regional share of highly qualified workers by one standard deviation is associated with between-job wage growth of about three percent and an increase in the annual probability of a job change of up to four percent. Wage gains are incurred only by workers changing jobs within industries. Consistently, workers in skilled regions are about fifty percent more likely to change jobs within rather than between industries. Taken together, these findings suggest that human capital externalities partly arise because workers in skilled regions have better access to labor market information, which allows them to capitalize on their industry-specific knowledge when changing jobs.

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Bibliographic Info

Paper provided by Institute of Labour Law and Industrial Relations in the European Union (IAAEU) in its series IAAEG Discussion Papers until 2011 with number 201101.

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Length: 30 pages
Date of creation: Jan 2011
Date of revision:
Publication status: Published in European Journal of Spatial Development 48 (2012), pages 1-27
Handle: RePEc:iaa:wpaper:201101

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Keywords: Human Capital Externalities; Job Matching;

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