The dynamics of local employment in France
AbstractWe study the impact of local economic structure on employment dynamics. Local employment is decomposed into the product of the average plant size and the number of plants in the area and industry. We estimate the dynamics of both components simultaneously using French yearly data on 36 industries and 341 areas between 1984 and 1993. The careful specification of short-run dynamics and the control for fixed effects and endogeneity are shown to be critical in the empirical model. First, static externalities are prevalent compared to dynamic ones. Moreover, whereas area-and-industry effects explain most of the spatial variation of plant size, the local number of plants is mainly driven by the current local economic structure. Policies targeted towards plant creation should thus be more efficient. For instance, large areas endowed with a small number of even size industries have both more and larger plants. A large number of plants heterogenous in size also increases the average plant size, but the number of plants is higher when plants have similar size.
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Bibliographic InfoPaper provided by Laboratoire d'Economie Appliquee, INRA in its series Research Unit Working Papers with number 0402.
Length: 30 pages
Date of creation: Feb 2004
Date of revision:
Contact details of provider:
Postal: INRA-LEA, 48, Boulevard Jourdan, 75014 Paris, France
Phone: 331 43136364
Fax: 331 43136362
Web page: http://www.inra.fr/Internet/Departements/ESR/UR/lea/index.html
labor market; panel data; economic geography; employment.;
Other versions of this item:
- Combes, Pierre-Philippe & Magnac, Thierry & Robin, Jean-Marc, 2003. "The Dynamics of Local Employment in France," CEPR Discussion Papers 3912, C.E.P.R. Discussion Papers.
- Combes, Pierre-Philippe & Magnac, Thierry & Robin, Jean-Marc, 2004. "The Dynamics of Local Employment in France," IZA Discussion Papers 1061, Institute for the Study of Labor (IZA).
- Pierre-Philippe Combes & Thierry Magnac & Jean-Marc Robin, 2003. "The Dynamics of Local Employment in France," Working Papers 2003-15, Centre de Recherche en Economie et Statistique.
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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