Benefits of dense labour markets: Evidence from transitions to employment in Germany

Silke Hamann, Annekatrin Niebuhr and Jan Cornelius Peters

No 2016-07, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics

Abstract: We analyse whether the size of the local labour market allows for better matching between job seekers and vacancies, which is thought to enhance productivity. This analysis is based on a large data set providing detailed micro-level information on new employment relationships in Germany. Our results suggest rather small matching benefits. Doubling employment density increases the productivity of new employment relationships by 1.1% to 1.2%. Moreover, the findings indicate that the benefits accrue only to persons experiencing job-to-job transitions and short-term unemployed. We detect no important impact of agglomeration on transitions from long-term non-employed.

Keywords: agglomeration economies; matching; urban wage premium; transitions to employment (search for similar items in EconPapers)
JEL-codes: J31 R23 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-eur, nep-geo, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Benefits of dense labour markets: evidence from transitions to employment in Germany (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:201607

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