Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1352: Mysteries of the Trade? Skill-Specific Local Agglomeration Economies

Martin Andersson () and Johan P Larsson ()
Additional contact information
Martin Andersson: Department of Industrial Economics Blekinge Institute of Technology (BTH), Postal: and Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Johan P Larsson: University of Cambridge, Department of Land Economy, Postal: and Centre for Entrepreneurship and Spatial, Economics (CEnSE) at Jönköping International Business School (JIBS).

Abstract: Using longitudinal Swedish data, we document robust evidence of highly local spillovers between individuals in similar occupations. The results are consistent with the existence of knowledge spillovers between workers performing similar work tasks in the same city-district. We further demonstrate less distance-sensitive benefits of working in diverse districts and regions, characterized by high density of employees in other occupations. The diversity benefits exist only in metropolitan areas and pertain to workers performing advanced services or non-routine work tasks.

Keywords: Agglomeration economies; Wages; Spillovers; Attenuation; Clusters; Economic proximity; Relatedness

JEL-codes: J24; R10; R12

26 pages, August 31, 2020

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