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Agglomeration and Labour Markets: The Impact of Transport Investments on Labour Market Outcomes

In: Geography, Institutions and Regional Economic Performance

Author

Listed:
  • Sabine D’Costa

    (Queen Mary University of London and SERC)

  • Steve Gibbons

    (LSE and SERC)

  • Henry Overman

    (LSE and SERC)

  • Panu Pelkonen

    (University of Sussex and SERC)

Abstract

One of the possible causes of poorer labour market outcomes for workers in peripheral regions is the small size of cities in these regions. Given this possibility, and the difficulty of affecting city size directly, a frequent policy response has been to invest in transport in order to increase access to markets. In this chapter we investigate how local labour markets respond to these potential transport improvements. We use data on individual workers in the UK to assess how area wages respond to better market access and examine whether this variation is due to a changing composition of the labour market or to higher wages for existing workers. Our results indicate that the increase in wages associated with reductions in transport times stems from changes in the composition of the workforce and that wage increases for local workers with unchanged characteristics are minimal.

Suggested Citation

  • Sabine D’Costa & Steve Gibbons & Henry Overman & Panu Pelkonen, 2013. "Agglomeration and Labour Markets: The Impact of Transport Investments on Labour Market Outcomes," Advances in Spatial Science, in: Riccardo Crescenzi & Marco Percoco (ed.), Geography, Institutions and Regional Economic Performance, edition 127, pages 263-279, Springer.
    • Handle: RePEc:spr:adspcp:978-3-642-33395-8_13
    DOI: 10.1007/978-3-642-33395-8_13
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