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

Zoltán Elekes (), Rikard Eriksson () and Anna Baranowska-Rataj ()
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Zoltán Elekes: Centre for Economic and Regional Studies, Umeå University
Rikard Eriksson: Umeå University
Anna Baranowska-Rataj: Umeå University

No 2315, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

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.

Keywords: skill-relatedness network; local labour market; low-wage workers; diversification and structural change; relatedness density (search for similar items in EconPapers)
JEL-codes: J21 J31 R11 R23 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-geo, nep-lma, nep-net, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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