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Rikard Eriksson, Urban Lindgren & Gunnar Malmberg Department of Social and Economic Geography

Labour Market Mobility and Regional Agglomeration A longitudinal analysis of labour mobility in Sweden 1990-2002. Rikard Eriksson, Urban Lindgren & Gunnar Malmberg Department of Social and Economic Geography Umeå University, Sweden. 1. Rikard.Eriksson@geography.umu.se.

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Rikard Eriksson, Urban Lindgren & Gunnar Malmberg Department of Social and Economic Geography

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  1. Labour Market Mobility and Regional AgglomerationA longitudinal analysis of labour mobility in Sweden 1990-2002 Rikard Eriksson, Urban Lindgren & Gunnar Malmberg Department of Social and Economic Geography Umeå University, Sweden 1

  2. Rikard.Eriksson@geography.umu.se The significance of labour mobility • Essential for regional growth, innovation diffusion and career advancement (BATHELT ET AL 2004; HUDSON 2005; VAN HAM 2001) • Allocates embodied human-capital or tacit knowledge (FELDMAN 2000; GERTLER 2003) 2

  3. Rikard.Eriksson@geography.umu.se Examples: • Angel (1991) Environment and Planning A Mobility of semiconductors within Silicon Valley contributed to a rapid internal circulation of knowledge. • Almeida & Kogut (1999) Management Science Innovations where connected to the career-paths of key-individuals in the semiconductor industry in Silicon Valley. • Lawson (1999) Cambridge Journal of Economics Labour mobility between firms enhanced the knowledge creation within the Bio-Tech cluster in Cambridge. • Power & Lundmark (2004) Urban Studies Higher degrees of labour mobility within the prospering ICT-cluster in Stockholm than in the rest of Stockholm LLM. 3

  4. Rikard.Eriksson@geography.umu.se Aim To investigate how individual-, firm- and place-specific attributes affect the propensity for individuals to change job both within and between local labour markets in Sweden (1990-2002) 4

  5. Rikard.Eriksson@geography.umu.se Data and definitions • Data: Longitudinal micro-data (1990-2002) • Sample: 150 000 individuals each year • Age: 25-65 • Income: ≥ 19 500 € / year • No unemployment benefits • Working in two consecutive years • Regions: 100 Local labour markets (LLM) • Intraregional mobility: • Unique workplace identifier and workplace coordinates t0 ≠ t1 • LLM t0 = LLM t1 • Interregional mobility: • Unique workplace identifier and workplace coordinates t0 ≠ t1 • LLM t0 ≠ LLM t1 5

  6. ( ( Local firms in industry Local firms, all industries ( ( / Total firms in industry Total firms, all industries Rikard.Eriksson@geography.umu.se 1. Localisation economies • External savings from a spatial concentration of similar and related firms (DICKEN & LLOYD 1990; HOOVER 1937) • “Pool of labour” & “A constant market for skills” (MARSHALL 1890) Hypothesis 1: The larger the share of similar and related firms in a region, the higher the probability of intraregional mobility and the smaller the probability of interregional mobility. LOCALISATION EFFECT (log) = MALMBERG, MALMBERG & LUNDEQVIST (2000) 6

  7. Rikard.Eriksson@geography.umu.se 2. Urbanisation economies • External savings due to shared costs in large regions (DICKEN & LLOYD 1990; HOOVER 1937) • Enhances efficient job-matching (PECK 1996) • Higher productivity and wages both attract and retain labour within the locality (HANSON 2000) Hypothesis 2: The larger the size of the labour market, the higher the intraregional job mobility and the lower the interregional job mobility. URBANISATION EFFECT (log) =ll l Dummies: METROPOLITAN, REGIONAL CENTRE, OTHER LARGE, OTHER SMALL Total firms (all industries) – localisation economies MALMBERG, MALMBERG & LUNDEQVIST (2000) 7

  8. ( ( Firm employment Local employment, all industries ( ( / National employment in industry National employment, all industries MALMBERG, MALMBERG & LUNDEQVIST (2000) Rikard.Eriksson@geography.umu.se 3. Scale economies • Savings from internal specialisation in large firms (DICKEN & LLOYD 1990; HOOVER 1937) • A large dominating firm compared to both region and nation with only a few similar jobs outside the firm Hypothesis 3: The more dominant the firm is in a branch, the smaller the probability of both intraregional and interregional mobility. SCALE EFFECT (log) = 8

  9. Rikard.Eriksson@geography.umu.se The value of immobility • Insider-advantages are accumulated when working at the same place for some time (BECKER 1962; FISCHER ET AL 1998; SIMPSON 1992) • Firm-, place- or branch-specific • Sunk-costs arises in the case of mobility but are less severe for people with a transferable human capital Hypothesis 4: People with a long duration of stay in the same workplace have gained a firm-specific knowledge and are more likely to stay in the same workplace, while people with previous experience of job moves have acquired a more transferable human capital and are more likely to change job DURATION (0-5), MOVES (0-5) 9

  10. Rikard.Eriksson@geography.umu.se Empirical model • Random-effects model • Two separate regressions (inter- and intraregional) • Base: All non-movers 10

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  12. Rikard.Eriksson@geography.umu.se Concluding remarks • The composition of the regional economy has a significant effect on job mobility • The local circulation of tacit knowledge is enhanced in large urban areas and in smaller specialised regions • The location-specific conceptualisation of insider-knowledge explains the positive effects of localisation economies • Risk: Lock-in effects 12

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