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Local access to skill-related high-income jobs facilitates career advancement for low-wage workers

Zoltan Elekes, Anna Baranowska-Rataj and Rikard Eriksson

No 2136, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: A considerable proportion of jobs across labour markets of the Western world are low-wage jobs, while the number of “bad†jobs with deteriorating working conditions and task content is growing. This puts pressure on both successful and lagging regions as low- wage workers struggle to avoid getting priced out of urban areas, while diminishing economic opportunities in more lagging regions fuel social and political discontent. The aim of this paper is to provide empirical evidence on the role of local labour market structure and evolution in enabling or constraining workers in escaping low-wage jobs. Drawing on the network-based approach of evolutionary economic geography in measuring local labour market structure we employ a uniquely detailed individual-level panel dataset provided by Statistics Sweden to construct skill-relatedness networks for 72 functional labour market regions in Sweden. Our fixed-effect panel regressions indicate that the density of skill-related high-income jobs within a region is conductive of low-wage workers moving to better-paid jobs. While metropolitan regions offer a premium for this relationship, it also holds for smaller regions, as well as across various worker characteristics.

Keywords: skill-relatedness network; local labour market; low-wage workers; structural change; relatedness density (search for similar items in EconPapers)
Date: 2021-11, Revised 2021-11
New Economics Papers: this item is included in nep-geo, nep-tid and nep-ure
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