Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2022/4: Geographies of Low-Income Jobs: The concentration of low-income jobs, the knowledge economy and labor market polarization in Sweden, 1990-2018

Alvaro von Borries (), Markus Grillitsch () and Karl-Johan Lundquist ()
Additional contact information
Alvaro von Borries: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden
Markus Grillitsch: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden
Karl-Johan Lundquist: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden

Abstract: In this paper we explore the (changing) spatial concentration of low-income jobs throughout the last 30 years in Sweden, a period that has been characterized by the rise of what has become known as the knowledge economy. In particular, we describe (map) and try to understand what drives the concentration of low-income jobs in certain regions and how that has changed in time. We observe an overall decrease of the prevalence of low-income jobs during the last three decades. Moreover, regions have also converged, meaning that the great differentiator between places is less and less about how many low-income jobs they host, but how many very well paid there are. We also find that labor market polarization does not seem to lead to a greater incidence of low-income jobs when measured against a threshold related to the national income distribution, but, as expected, it does when we move towards a regional threshold, thus accounting for regional income differences. Finally, regions with a larger knowledge economy have tended to have a lower incidence of low-income jobs, both measured with respect to the national and to the regional income. This points towards the knowledge economy being a source of regional prosperity either through the upgrading of jobs or rising the wages of low- income workers. Despite all the discourse about the degradation of the Nordic model, we provide some evidence for it to be still working in Sweden under this new and complex knowledge-dominated era.

Keywords: low-income jobs; regional development; inequality; knowledge economy; labor market polarization

JEL-codes: D31; J21; P25; R12; R23

Language: English

31 pages, March 31, 2022

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