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

Zoltán Elekes, Anna Baranowska-Rataj and Rikard Eriksson

Cambridge Journal of Regions, Economy and Society, 2023, vol. 16, issue 3, 417-430

Abstract: This article 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)
Date: 2023
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