Occupational Coherence and the Geography of Unemployment

Catherine Laffineur, Charlie Joyez and Raja Kali
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Raja Kali: University of Arkansas, Fayetteville, USA

No 2023-20, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: Why do labor markets in some regions perform better than in others? This paper studies how the occupational coherence of local labor markets shapes regional unemployment dynamics. Using matched employer-employee data for France, we develop a network of inter-occupational relatedness based on worker mobility. By mapping local occupational structures onto this occupation space, we derive a measure of occupational coherence for 304 commuting zones in France. Occupational coherence captures the ease with which workers can switch jobs locally. Using a shift-share instrument that exploits exogenous trade shocks to other developed countries, we find that local labor markets with higher occupational coherence experience significantly lower unemployment. This effect operates mainly through within-firm reallocation: workers in more coherent labor markets are more likely to adjust by moving internally to other occupations. Our findings highlight the importance of occupational structure for local labor market performance and suggest that policies fostering occupational mobility can help reduce local unemployment rates.

Keywords: occupational mobility; regional occupational composition; occupational coherence; economic shocks; unemployment dynamics (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 J24 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2023-12, Revised 2025-07
New Economics Papers: this item is included in nep-eur, nep-lma, nep-tid and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2023-20

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