The Spatial Sorting and Matching of Skills and Firms

Abstract

Original citation:Mion, Giordano and Naticchioni, Paolo (2009) AbstractThis paper aims at assessing the role of market linkages in shaping the spatial distribution of earnings. Using a space-time panel data on Italian provinces, I structurally estimate a NEG model in order to both test the coherence of theory with data, as well as to give a measure of the extent of spatial externalities. Particular attention has been paid to those endogeneity issues that arise when dealing with both structural models and spatial data. Results suggest that final demand linkages influence the location of economic activities and that their spread over space is, contrary to previous findings, not negligible.  2004 Elsevier Inc. All rights reserved.JEL classification: F12; R12; R32

What Drives the Urban Wage Premium? Evidence Along the Wage Distribution

“…It is worth noting that stayers in HD provinces earn significantly more than stayers in LD provinces. This confirms that the bulk of wage differences across the space dimension is also due to stayers, as emphasized by Mion and Naticchioni (). Moreover, the urban wage premium for stayers in HD provinces with respect to those in LD provinces increases along the wage distribution, ranging from 1.5 percent at the bottom of the wage distribution to 4.4 percent at the top.…”

“…Using INPS provincial data on industrial and service employment for the period 1986–2003, we can define the employment density, which represents the proxy for urban agglomeration. It is defined as in Combes (), Mion and Naticchioni (), Matano and Naticchioni (), and De Blasio and Di Addario (): employment in province p at time t out of the province area in square kilometer. The spatial breakdown is hence given by the province ( provincia ), classified in 95 units…”

“…Another explanation that entails the possibility of a wage growth effect being generated is the “coordination” hypothesis, since cities enhance the probability of a better match between workers and firms, and this probability increases with the time spent in cities (Helsley and Strange, ; Kim, ; Yankow, ). Furthermore, the literature has also pointed out the importance of controlling for the sorting of workers, since the urban wage premium could be the outcome, at least partially, of skilled workers being sorted into cities (Combes, Duranton, and Gobillon, ; Mion and Naticchioni, ; Matano and Naticchioni, ).…”

“…In the first part of the paper, we analyze the wage dynamics of migrants from lower to higher, and from higher to lower, density provinces, by means of a quantile regression approach ; Mion and Naticchioni, ) and along the wage distribution (Matano and Naticchioni, ), the analysis takes into account the workers’ unobserved heterogeneity by carrying out quantile fixed‐effect estimations.…”

The Determinants of Localization and Urbanization Economies: Evidence From the Location of New Firms in Spain

“…The second interpretation (a “matching” mechanism) formalized by Hesley and Strange () posits that workers and firms are better matched in larger markets. Costa and Kahn (),Andersson, Burgess, and Lane (), and Mion and Naticchioni () test if the quality of employer–employee matches are better in densely populated areas, finding conflicting evidence. Another group of studies examine spatial variation in worker mobility.…”