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

Author Info

  • 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
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Handle: RePEc:zbw:hwwirp:1-36
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Keywords: regional labour markets; skill segregation; human capital;

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. David Autor, 2000. "Wiring the Labor Market," NBER Working Papers 7959, National Bureau of Economic Research, Inc.
  2. Acemoglu, Daron, 1996. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," CEPR Discussion Papers 1459, C.E.P.R. Discussion Papers.
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  5. Acemoglu, D., 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," Working papers 97-14, Massachusetts Institute of Technology (MIT), Department of Economics.
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  9. Gilles Duranton, 1998. "The Economics of Productive Systems: Segmentation and Skill-Biased Change," CEP Discussion Papers dp0398, Centre for Economic Performance, LSE.
  10. Lindbeck, Assar & Snower, Dennis J., 1996. "Reorganization of Firms and Labour Market Inequality," CEPR Discussion Papers 1375, C.E.P.R. Discussion Papers.
  11. Judith Hellerstein & David Neumark, 2007. "Workplace Segregation in the United States: Race, Ethnicity, and Skill," Working Papers 07-02, Center for Economic Studies, U.S. Census Bureau.
  12. 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.
  13. Michael Kremer & Eric Maskin, 1996. "Wage Inequality and Segregation by Skill," NBER Working Papers 5718, National Bureau of Economic Research, Inc.
  14. 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.
  15. 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).
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