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Regional diversification and labour market upgrading: Local access to skill-related high-income jobs helps workers escaping low-wage employment

Author

Listed:
  • Zoltán Elekes

    (Centre for Economic and Regional Studies, Umeå University)

  • Rikard Eriksson

    (Umeå University)

  • Anna Baranowska-Rataj

    (Umeå University)

Abstract

This paper investigates how the evolution of local labour market structure enables or constrains workers as regards escaping low-wage jobs. Drawing on the network-based approach of evolutionary economic geography, we employ a detailed individual-level panel dataset to construct skill-relatedness networks for 72 functional labour market regions in Sweden. Subsequent fixed-effect panel regressions indicate that increasing density of skill-related high-income jobs within a region is conducive to low-wage workers moving to better-paid jobs, hence facilitating labour market upgrading through diversification. While metropolitan regions offer a premium for this relationship, it also holds for smaller regions, and across various worker characteristics.

Suggested Citation

  • Zoltán Elekes & Rikard Eriksson & Anna Baranowska-Rataj, 2023. "Regional diversification and labour market upgrading: Local access to skill-related high-income jobs helps workers escaping low-wage employment," CERS-IE WORKING PAPERS 2315, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:2315
    as

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    References listed on IDEAS

    as
    1. Benjamin Davies & David C. Maré, 2021. "Relatedness, complexity and local growth," Regional Studies, Taylor & Francis Journals, vol. 55(3), pages 479-494, March.
    2. Dan O'Donoghue & Bill Gleave, 2004. "A Note on Methods for Measuring Industrial Agglomeration," Regional Studies, Taylor & Francis Journals, vol. 38(4), pages 419-427.
    3. Tian, Zheng, 2013. "Measuring Agglomeration Using the Standardized Location Quotient with a Bootstrap Method," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 43(2).
    4. Nicola Cortinovis & Jing Xiao & Ron Boschma & Frank G van Oort, 2017. "Quality of government and social capital as drivers of regional diversification in Europe," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1179-1208.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    skill-relatedness network; local labour market; low-wage workers; diversification and structural change; relatedness density;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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