Third Workshop on Spatial Dimensions of the Labour Market Focuses on Inequality

On 30 and 31 March 2017, the Institute for Employment (IAB), the Rimini Centre for Economic Analysis (RCEA), and the Centre for European Economic Research (ZEW) held a third joint workshop on the spatial dimensions of the labour market at ZEW in Mannheim. About 45 participants from around the world presented research exploring the issue of spatial inequality – the focus of this year’s conference – from various perspectives. The workshop was organised as part of the international research programme „Strengthening Efficiency and Competitiveness in the European Knowledge Economies“ (SEEK).

Jens Südekum, professor at the University of Düsseldorf, opened the workshop with a keynote lecture on the role sorting and matching of firms and workers has to play in the current state of wage disparity across German cities. His research shows that better matches between firms and workers in denser labour markets have led in large part to the wage disparity between small and big cities. In the second keynote speech, Professor Andrés Rodriguez-Pose from the London School of Economics provided some insights into the drivers of employment growth across European regions. He emphasised in particular that higher innovation levels and investment in education contribute to job creation, especially for highly skilled workers; however, it is still the quality of the government and public institutions that have the most significant impact on low-skill employment growth.

Employment growth depends on local firm size

The closing keynote lecture was given by Professor Gilles Duranton from the Wharton School of the University of Pennsylvania on the role of local establishment size for employment growth. This research question is of high political relevance as it relates to the efficiency of public programmes targeting the location and development of firms within and across cities. He highlighted the negative association between local firm size and growth which has been found in many empirical applications and might be driven by reverse causality. Using an instrumental variable approach, his research suggests that establishment size has a positive effect on employment growthin US cities.

Platform for interdisciplinary scientific exchange

Over the course of 45 presentations, researchers from Europe and the US discussed a variety of topics, such as agglomeration effects on employment and wage inequality, migration and sorting across space, as well as the consequences of demographic changes, international trade and institutions on local labour markets. Over two intense days of presentations and lively talks, the workshop was successful in its goal of bringing together frontier researchers from the fields of labour economics, regional economics, geography, and other related fields for in-depth discussions on the issue of inequality across space.

Promotion of excellent economic research through SEEK

The workshop was partly financed by funds from the SEEK research project on „Fiscal and Labour Policy Institutions and Inequality“. This project aims to developa deeper understanding of inequality both within and between regions in Germany and Europe and combines the expertise of researchers from different ZEW departments working in the fields of regional labour and public economics. The ZEW research programme „Strengthening Efficiency and Competitiveness in the European Knowledge Economies“ (SEEK) has been funded by the State of Baden-Württemberg since 2010. The overarching aim of the programme is to promote excellent economic research, with a particular focus placed on developing ZEW's international network. Up to now, researchers at ZEW have completed over 40 practical research projects in collaboration with international partners as part of the SEEK programme.