Labour Market Mobility and Regional Agglomeration A longitudinal analysis of labour mobility in Sweden Rikard Eriksson, Urban Lindgren & Gunnar Malmberg Department of Social and Economic Geography Umeå University, Sweden 1

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) The significance of labour mobility 2

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

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 ( ) Aim 4

Data: Longitudinal micro-data ( ) Sample: individuals each year –Age: –Income: ≥ € / year –No unemployment benefits –Working in two consecutive years Regions: 100 Local labour markets (LLM) Intraregional mobility: –Unique workplace identifier and workplace coordinates t 0 ≠ t 1 –LLM t 0 = LLM t 1 Interregional mobility: –Unique workplace identifier and workplace coordinates t 0 ≠ t 1 –LLM t 0 ≠ LLM t 1 Data and definitions 5

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) = Local firms in industry Total firms in industry ( ( Local firms, all industries Total firms, all industries ( ( / 1. Localisation economies MALMBERG, MALMBERG & LUNDEQVIST (2000) 6

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 2. Urbanisation economies Total firms (all industries) – localisation economies MALMBERG, MALMBERG & LUNDEQVIST (2000) 7

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) = 3. Scale economies Firm employment National employment in industry ( ( Local employment, all industries National employment, all industries ( ( / MALMBERG, MALMBERG & LUNDEQVIST (2000) 8

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) The value of immobility 9

Empirical model Random-effects model Two separate regressions (inter- and intraregional) Base: All non-movers 10

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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