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Endogenous local labour markets, regional aggregation and agglomeration economies

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  • Jordy Meekes

    (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne)

  • Wolter H. J. Hassink

    (Utrecht University, Utrecht University School of Economics, Utrecht, the Netherlands IZA – Institute of Labor Economics, Bonn, Germany)

Abstract

This paper examines the role of regional aggregation in measuring agglomeration externalities. Using Dutch administrative data, we define local labour markets (LLMs) based on the worker's commuting outcomes, gender and educational attainment, and show that higheducated workers and male workers are characterised by a relatively large LLM. We find that the effect of employment density on workers' wages increases in the level of regional aggregation, explained by larger agglomeration externalities at a higher spatial scale. We quantify subgroup differentials and find that high-educated workers have agglomeration externalities twice as high as low-educated workers. We show that workers who lose their job in denser LLMs experience positive agglomeration externalities on job matching, with more modes losses in wages and again larger density effects at higher levels of regional aggregation.

Suggested Citation

  • Jordy Meekes & Wolter H. J. Hassink, 2019. "Endogenous local labour markets, regional aggregation and agglomeration economies," Melbourne Institute Working Paper Series wp2019n21, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2019n21
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    3. Laws, A., 2020. "Localised employment spillovers," Cambridge Working Papers in Economics 2067, Faculty of Economics, University of Cambridge.
    4. Jordy Meekes, 2022. "Agglomeration Economies and the Urban Wage Premium in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 25(1), pages 25-54.
    5. Almeida, Eloiza R.F. & Araújo, Veneziano & Gonçalves, Solange L., 2022. "Urban wage premium for women: evidence across the wage distribution," World Development, Elsevier, vol. 159(C).
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    7. Meekes, Jordy & Hassink, Wolter H.J., 2022. "Gender differences in job flexibility: Commutes and working hours after job loss," Journal of Urban Economics, Elsevier, vol. 129(C).

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    9. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    10. repec:zbw:bofrdp:2015_027 is not listed on IDEAS
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    More about this item

    Keywords

    Urban wage premium; Job loss; Local Labour Markets; Commuting; Agglomeration;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    Statistics

    Access and download statistics

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