EconStor >
Universität Trier >
Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union (IAAEU), Universität Trier >
IAAEU Discussion Paper Series in Economics, Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union, Trier >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/51414
  
Title:Job turnover, risk sharing, and regional wages in Western Germany PDF Logo
Authors:Heuermann, Daniel F.
Issue Date:2008
Series/Report no.:IAAEG discussion paper series 04/2008
Abstract:We test Krugman's (1991) notion of risk sharing in pooled labor markets as one of the micro-foundations of agglomeration economies, i.e. we examine whether firms share risks from idiosyncratic and sector specific shocks through labor pooling. Estimating wage functions we find that job turnover depresses wages at the regional and the firm level, indicating that firms incur significant adjustment costs when experiencing productivity shocks. On the regional level, industrial specialization and diversification mitigate wage depressing effects of different types of employment shocks. On the firm level, shock intensive firms are found to be more productive when being located in spatial proximity to firms with large but opposite employment shocks. Both findings provide evidence that labor pooling matters as a source of agglomeration economies by allowing firms to share employment risks. However, we find only weak evidence for shock intensive industries to be more concentrated, suggesting that agglomeration costs exceed the benefits from risk sharing.
Subjects:Marshallian Externalities
Labor Pooling
Specialization
Idiosyncratic Shocks
JEL:R12
R30
J31
J63
Document Type:Working Paper
Appears in Collections:IAAEU Discussion Paper Series in Economics, Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union, Trier

Files in This Item:
File Description SizeFormat
672229021.pdf871.18 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/51414

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.