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What Places Grow Faster? An Empirical Analysis of Employment Growth Factors at a Local Level for the Spanish Economy

Author

Listed:
  • Diana Guti�rrez Posada
  • Fernando Rubiera Moroll�n

    ()

  • Ana Vi�uela Jim�mez

    (Regional Economics Laboratory (REGIOlab), University of Oviedo)

Abstract

The objective of this work is to study employment growth and its determinants in Spain at a high degree of spatial disaggregation. The impossibility of accessing data on GDP at local scale makes this a particularly interesting issue, as employment growth can be used as a proxy of local economic growth and can therefore be expected to provide some insights into the factors determining local economic development. Using the 2001 Census database, we have information on several economic variables at local level (municipalities) which we then aggregate into Local Labour Market Areas (LLMs), as we believe these functional regions may be the ideal level of disaggregation to study employment or economic growth. Based on the ideas of New Economic Geography (NEG), we first analyze the influence of size and geographical position of the LLM on employment growth. As well as considering the Euclidean distance from the LLM to the main metropolitan areas we also use a novel approach based on the notion of incremental distances. Once the importance of the NEG approach is confirmed, we also examine the traditional determinants of economic growth used in macroeconomic studies, but in this occasion applied at local level, such as education, diversification and sectoral structure. Finally, to confirm the relevance of location, spatial auto-regressive models are estimated. Our results show that employment growth is mainly driven by geo-economic variables such as size and distance instead of the economic policy variables in the hands of the central or regional governments.

Suggested Citation

  • Diana Guti�rrez Posada & Fernando Rubiera Moroll�n & Ana Vi�uela Jim�mez, 2013. "What Places Grow Faster? An Empirical Analysis of Employment Growth Factors at a Local Level for the Spanish Economy," Documentos de trabajo - IRENe 0005, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
  • Handle: RePEc:edg:irenen:0005
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    More about this item

    Keywords

    local employment growth; local labour markets; NEG; incremental distances; local and regional policies; Spain;

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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