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Marshallian labor market pooling: evidence from Italy

  • Monica Andini

    ()

    (Bank of Italy)

  • Guido de Blasio

    ()

    (Bank of Italy)

  • Gilles Duranton

    ()

    (Wharton School, University of Pennsylvania)

  • William C. Strange

    ()

    (Rotman School of Management, University of Toronto)

This paper employs a unique Italian data source to take a comprehensive approach to labor market pooling. It jointly considers many different aspects of the agglomeration - labor market relationship, including turnover, learning, matching, and hold up. It also considers labor market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labor market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labor pooling, labor poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labor market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms.

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Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 922.

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Date of creation: Jul 2013
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Handle: RePEc:bdi:wptemi:td_922_13
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