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Productivity and Local Workforce Composition

  • David C. Maré

    ()

    (Motu Economic and Public Policy Research)

  • Richard Fabling

    ()

    (Reserve Bank of New Zealand)

This chapter examines the link between firm productivity and the population composition of the areas in which firms operate. We combine annual firm-level microdata on production, covering a large proportion of the New Zealand economy, with area-level workforce characteristics obtained from population censuses. Overall, the results support the existence of agglomeration effects that operate through labour markets. We find evidence of productive spillovers from operating in areas with high-skilled workers, and with high population density. A high-skilled local workforce benefits firms in high-skilled and high-research and development industries, and small firms. The benefits of local population density are strongest for firms in dense areas, and for small and new firms. Firms providing local services are more productive in areas with high shares of migrants and new entrants, consistent with local demand factors.

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File URL: http://motu-www.motu.org.nz/wpapers/11_10.pdf
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Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 11_10.

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Length: 27 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:mtu:wpaper:11_10
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  1. Hunt, Jennifer & Gauthier-Loiselle, Marjolaine, 2009. "How Much Does Immigration Boost Innovation?," IZA Discussion Papers 3921, Institute for the Study of Labor (IZA).
  2. Richard Fabling, 2009. "A Rough Guide to New Zealand's Longitudinal Business Database," Global COE Hi-Stat Discussion Paper Series gd09-103, Institute of Economic Research, Hitotsubashi University.
  3. Henry Overman & Diego Puga, 2008. "Labour Pooling as a Source of Agglomeration: An Empirical Investigation," SERC Discussion Papers 0006, Spatial Economics Research Centre, LSE.
  4. Giles Duranton & Diego Puga, 2003. "Micro-Foundations of Urban Agglomeration Economies," NBER Working Papers 9931, National Bureau of Economic Research, Inc.
  5. Lynne G. Zucker & Michael R. Darby, 2007. "Star Scientists, Innovation and Regional and National Immigration," NBER Working Papers 13547, National Bureau of Economic Research, Inc.
  6. Amiti, Mary & Pissarides, Christopher A., 2005. "Trade and industrial location with heterogeneous labor," Journal of International Economics, Elsevier, vol. 67(2), pages 392-412, December.
  7. Richard Fabling, 2011. "Keeping it Together: Tracking Firms on New Zealand’s Longitudinal Business Database," Working Papers 11_01, Motu Economic and Public Policy Research.
  8. Papps, Kerry L. & Newell, James O., 2002. "Identifying Functional Labour Market Areas in New Zealand: A Reconnaissance Study Using Travel-to-Work Data," IZA Discussion Papers 443, Institute for the Study of Labor (IZA).
  9. Edward L. Glaeser & Joshua D. Gottlieb, 2008. "The Economics of Place-Making Policies," NBER Working Papers 14373, National Bureau of Economic Research, Inc.
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