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Endogenous qualifications and firms' agglomeration

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  • Picard, Pierre M.
  • Toulemonde, Eric

Abstract

This paper analyzes firms' location when workers endogenously choose to qualify for professional skills but when they remain uncertain about the potential match between their personal abilities and/or affinities and the firms' specific production tasks. By qualifying in a region where firms agglomerate, workers benefit from higher prospects of good match. At the equilibrium, we show that firms may locate in a single cluster, symmetric clusters or even asymmetric clusters. Comparative statics with respect to product market demand and labor supply parameters are provided.
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Suggested Citation

  • Picard, Pierre M. & Toulemonde, Eric, 2004. "Endogenous qualifications and firms' agglomeration," Journal of Urban Economics, Elsevier, vol. 55(3), pages 458-477, May.
    • Handle: RePEc:eee:juecon:v:55:y:2004:i:3:p:458-477
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    1. Toulemonde, Eric, 2006. "Acquisition of skills, labor subsidies, and agglomeration of firms," Journal of Urban Economics, Elsevier, vol. 59(3), pages 420-439, May.
    2. Picard, Pierre M. & Wildasin, David, 2009. "Labor Market Pooling, Outsourcing and Labor Contracts," IZA Discussion Papers 4357, IZA Network @ LISER.
    3. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," 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 58, pages 2563-2608, Elsevier.
    4. Pierre M. Picard & David E. Wildasin, 2005. "Labor Market Pooling, Outsourcing and Contracts in Chamberlinian Cities," Economics Discussion Paper Series 0520, Economics, The University of Manchester.
    5. Joe Tharakan & Jean‐Philippe Tropeano, 2009. "On The Impact Of Labor Market Matching On Regional Disparities," Journal of Regional Science, Wiley Blackwell, vol. 49(1), pages 57-80, February.
    6. Picard, Pierre M. & Wildasin, David E., 2011. "Outsourcing, labor market pooling, and labor contracts," Journal of Urban Economics, Elsevier, vol. 70(1), pages 47-60, July.
    7. PICARD, Pierre M. & WILDASIN, David E., 2006. "Labor market pooling, outsourcing and contracts in Chamberlinian regions," LIDAM Discussion Papers CORE 2006060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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