Industry Clustering and Unemployment in US Regions: An Exploratory Note

Thomas Lambert, Gary Mattson and Kyle Dorriere

MPRA Paper from University Library of Munich, Germany

Abstract: Much has been written by various scholars and practitioners over the years about the benefits of industrial clustering, whether the clustering revolves around mature industries or around new and innovative industries (innovation clustering). The benefits of such clustering or local agglomeration economies supposedly include greater regional exports, greater employment growth, greater payroll growth, and greater new business establishment creation, among other impacts. However, the work for this research note has not uncovered much if any literature on how agglomeration affects United States regional unemployment rates. In general, greater clustering is associated with lower US metro area unemployment rates on average, although this depends upon how one defines a cluster. Additionally, most growing industrial and innovation clusters over the last two decades or so require highly educated and skilled workers. Since most of the unemployed at any given time tend to be less educated and less skilled than most workers on average, local and state economic development policies that focus on clustering must be careful in targeting lower unemployment rates as a policy goal or outcome. On the other hand, greater clustering and greater industry concentration do not seem to be associated with greater levels of unemployment during stagnant economic times as some may expect. That is, it does not appear that diversity of industry has an advantage over industry clustering and concentration in bad economic times. Finally, the arguments that decentralized or local economic development planning is better for the macroeconomy than centralized planning at the national level is discussed in light of the results for industrial clustering found in this paper.

Keywords: agglomeration economies; economic development; industrial clustering; unemployment; and urban economics. (search for similar items in EconPapers)
JEL-codes: R11 R3 R38 (search for similar items in EconPapers)
Date: 2016-02-16
New Economics Papers: this item is included in nep-geo, nep-ino, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/69584/1/MPRA_paper_69584.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:69584

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().