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The determinants of regional disparities in skill segregation: Evidence from a cross section of German regions

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  • Schlitte, Friso
  • Böttcher, Fabian
  • Niebuhr, Annekatrin
  • Diez, Javier Revilla

Abstract

Increasing inequality in qualification specific employment prospects characterises labour markets in most highly developed countries. Theoretical models suggest that in-plant skill segregation might matter for the polarisation of employment and wages. According to these models production technology and the educational level of the work force are important determinants of skill segregation. There are some studies that investigate the increasing in-plant skill segregation at the national level. However, since production technologies and skill structures are characterised by pronounced regional disparities, there are likely significant differences in the level of segregation between regions. But empirical evidence on corresponding regional inequalities is lacking. The objective of this analysis is to investigate regional disparities in skill segregation in Germany. Our findings point to marked disparities among German regions. Moreover, we analyse the determinants of these differences at the regional level. The results of a regression analysis indicate that the local endowment with human capital is an important determinant for the regional level of skill segregation. Furthermore, skill segregation is increasing in most areas during the period under consideration, which may lead to unfavourable labour-market conditions for low-skilled workers in corresponding regional labour markets. --

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Bibliographic Info

Paper provided by Hamburg Institute of International Economics (HWWI) in its series HWWI Research Papers with number 1-36.

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Date of creation: 2010
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Handle: RePEc:zbw:hwwirp:1-36

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Keywords: regional labour markets; skill segregation; human capital;

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  1. Daron Acemoglu, 2001. "Directed Technical Change," NBER Working Papers 8287, National Bureau of Economic Research, Inc.
  2. Judith Hellerstein & David Neumark, 2006. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 060710, University of California-Irvine, Department of Economics.
  3. Lindbeck, Assar & Snower, Dennis J., 1997. "Reorganization of Firms and Labor Market Inequality," Seminar Papers, Stockholm University, Institute for International Economic Studies 605, Stockholm University, Institute for International Economic Studies.
  4. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1997. "The Rise and Decline of the American Ghetto," NBER Working Papers 5881, National Bureau of Economic Research, Inc.
  5. Acemoglu, Daron, 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1707, C.E.P.R. Discussion Papers.
  6. Kremer, M & Maskin, E, 1996. "Wage Inequality and Segregation by Skill," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 96-23, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
  8. Gilles Duranton & Diego Puga, 2001. "From sectoral to functional urban specialisation," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20101, London School of Economics and Political Science, LSE Library.
  9. Acemoglu, Daron, 1996. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1459, C.E.P.R. Discussion Papers.
  10. Gilles Duranton, 1998. "The Economics of Productive Systems: Segmentation and Skill-Biased Change," CEP Discussion Papers dp0398, Centre for Economic Performance, LSE.
  11. David Autor, 2000. "Wiring the Labor Market," NBER Working Papers 7959, National Bureau of Economic Research, Inc.
  12. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
  13. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  14. Dohse, Dirk & Laaser, Claus-Friedrich & Schrader, Jörg-Volker & Soltwedel, Rüdiger, 2005. "Raumstruktur im Internetzeitalter: Tod der Distanz? Eine empirische Analyse," Kiel Discussion Papers 416/417, Kiel Institute for the World Economy (IfW).
  15. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, StataCorp LP, vol. 7(3), pages 281-312, September.
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