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Spatial spillover effects in the labour market in a middle-income country

Author

Listed:
  • Leonardo-Fabio Morales
  • Mauricio Quiñones
  • Eleonora Dávalos
  • Luis-Felipe Gaviria

Abstract

Most macroeconomic labour literature on estimating matching functions does not consider spatial spillover effects. However, job search and vacancy-filling processes often involve neighbouring locations, as local workers can search for and fill vacancies in nearby labour markets. We estimate a spatial spillover model using annual data for a middle-income country in Latin America. Our findings show that unemployment has a positive spatial spillover effect because an increase in the labour supply raises the probability of filling a vacancy. In contrast, vacancies have a negative spillover effect because local and neighbouring vacancies compete to be filled by workers in both markets.

Suggested Citation

  • Leonardo-Fabio Morales & Mauricio Quiñones & Eleonora Dávalos & Luis-Felipe Gaviria, 2025. "Spatial spillover effects in the labour market in a middle-income country," Spatial Economic Analysis, Taylor & Francis Journals, vol. 20(1), pages 53-71, January.
    • Handle: RePEc:taf:specan:v:20:y:2025:i:1:p:53-71
    DOI: 10.1080/17421772.2024.2378792
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    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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