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Skills and Spatial Sorting

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  • Thomas Persson

Abstract

Although, spatial sorting is of great interest for policy makers -- it has consequences on education, skills and inequality -- no overarching theoretical framework of spatial sorting exists. In the present study we propose a simple and analytically solvable spatial general equilibrium model of spatial sorting, where heterogeneously skilled and located workers simultaneously choose their level of education and spatial location. We derive the asymptotic optimality conditions for empirical likelihood of sorting and education under a large deviations optimality criterion. We also present higher-order properties of empirical likelihood. The structural model is estimated econometrically for EU-27 using individual level panel data for 2004-2013.

Suggested Citation

  • Thomas Persson, 2015. "Skills and Spatial Sorting," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 58(1), pages 66-91.
    • Handle: RePEc:eei:journl:v:58:y:2015:i:1:p:66-91
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    More about this item

    Keywords

    Spatial equilibrium; spatial sorting; skills distribution; education; labour mobility.;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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