Job Matching Efficiency in Skilled Regions - Evidence on the Microeconomic Foundations of Human Capital Externalities

Daniel Heuermann

No 201101, IAAEG Discussion Papers until 2011 from Institute of Labour Law and Industrial Relations in the European Union (IAAEU)

Abstract: Inspired by the literature on the role of local career networks for the quality of labor market matches we investigate whether human capital externalities arise from a higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany we find that an increase in the regional share of highly qualified workers by one standard deviation is associated with between-job wage growth of about three percent and an increase in the annual probability of a job change of up to four percent. Wage gains are incurred only by workers changing jobs within industries. Consistently, workers in skilled regions are about fifty percent more likely to change jobs within rather than between industries. Taken together, these findings suggest that human capital externalities partly arise because workers in skilled regions have better access to labor market information, which allows them to capitalize on their industry-specific knowledge when changing jobs.

Keywords: Human Capital Externalities; Job Matching (search for similar items in EconPapers)
JEL-codes: D62 J24 J31 R11 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2011-01
New Economics Papers: this item is included in nep-cis, nep-geo, nep-hrm, nep-lab and nep-ure
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Published in European Journal of Spatial Development 48 (2012), pages 1-27

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Persistent link: https://EconPapers.repec.org/RePEc:iaa:wpaper:201101

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