Spatial Spillover Effects in the Labor Market in a Middle-Income Country

Leonardo Morales, Mauricio Quiñones, Eleonora Dávalos and Luis Felipe Gaviria

Borradores de Economia from Banco de la Republica de Colombia

Abstract: Most macroeconomic labor literature on estimating matching functions does not consider spatial spillover effects. However, job search and vacancy-filling processes often involve neighboring locations, as local workers can search for and fill vacancies in nearby labor markets. We estimate a spatial spillover model using annual data for a middle-income country in Latin America. Our findings show that unemployment has a positive spatial spillover effect because an increase in the labor supply raises the probability of filling a vacancy. In contrast, vacancies have a negative spillover effect because local and neighboring vacancies compete to be filled by workers in both markets. RESUMEN: La mayor parte de la literatura laboral sobre la estimación de funciones de emparejamiento no considera los efectos de derrame espacial. Sin embargo, los procesos de búsqueda de empleo y de ocupación de vacantes a menudo involucran ubicaciones vecinas, ya que los trabajadores locales pueden buscar y cubrir vacantes en mercados laborales cercanos. En este trabajo se estima un modelo de derrame espacial utilizando datos anuales para Colombia. Nuestros hallazgos muestran que el desempleo tiene un efecto de derrame espacial positivo porque un aumento en la oferta laboral aumenta la probabilidad de ocupar una vacante. En contraste, las vacantes tienen un efecto de derrame negativo porque las vacantes locales y vecinas compiten por ser ocupadas por trabajadores de ambos mercados.

Keywords: Matching Function; Spatial Spillovers; Spatial Econometrics; Función de Emparejamiento; Efectos Espaciales; Econometría Espacia (search for similar items in EconPapers)
JEL-codes: J61 J64 R12 R14 (search for similar items in EconPapers)
Pages: 35
Date: 2024-10
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
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https://doi.org/10.32468/be.1283

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Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:1283

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