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The determinants of regional disparities in skill segregation: Evidence from a cross section of German regions

Author Info

Listed author(s):
  • Schlitte, Friso
  • Böttcher, Fabian
  • Niebuhr, Annekatrin
  • Diez, Javier Revilla

Abstract

Increasing inequality in qualification specific employment prospects characterises labour markets in most highly developed countries. Theoretical models suggest that in-plant skill segregation might matter for the polarisation of employment and wages. According to these models production technology and the educational level of the work force are important determinants of skill segregation. There are some studies that investigate the increasing in-plant skill segregation at the national level. However, since production technologies and skill structures are characterised by pronounced regional disparities, there are likely significant differences in the level of segregation between regions. But empirical evidence on corresponding regional inequalities is lacking. The objective of this analysis is to investigate regional disparities in skill segregation in Germany. Our findings point to marked disparities among German regions. Moreover, we analyse the determinants of these differences at the regional level. The results of a regression analysis indicate that the local endowment with human capital is an important determinant for the regional level of skill segregation. Furthermore, skill segregation is increasing in most areas during the period under consideration, which may lead to unfavourable labour-market conditions for low-skilled workers in corresponding regional labour markets.

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Paper provided by Hamburg Institute of International Economics (HWWI) in its series HWWI Research Papers with number 1-36.

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Date of creation: 2010
Handle: RePEc:zbw:hwwirp:1-36
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Keywords: regional labour markets; skill segregation; human capital;

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Find related papers by JEL classification:
  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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  1. Judith K. Hellerstein & David Neumark, 2008. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 459-477, August.
  2. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June.
  3. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1055-1089.
  4. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
  5. Kremer, M & Maskin, E, 1996. "Wage Inequality and Segregation by Skill," Working papers 96-23, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December.
  7. Lindbeck, Assar & Snower, Dennis J, 1996. "Reorganization of Firms and Labor-Market Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 315-321, May.
  8. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  9. Dohse, Dirk & Laaser, Claus-Friedrich & Schrader, Jörg-Volker & Soltwedel, Rüdiger, 2005. "Raumstruktur im Internetzeitalter: Tod der Distanz? Eine empirische Analyse," Kiel Discussion Papers 416/417, Kiel Institute for the World Economy (IfW).
  10. Duranton, Gilles & Puga, Diego, 2005. "From sectoral to functional urban specialisation," Journal of Urban Economics, Elsevier, vol. 57(2), pages 343-370, March.
  11. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
  12. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
  13. David H. Autor, 2001. "Wiring the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 25-40, Winter.
  14. Duranton, Gilles, 2004. "The economics of production systems: Segmentation and skill-biased change," European Economic Review, Elsevier, vol. 48(2), pages 307-336, April.
  15. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  16. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
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