Marshallian agglomeration, labour pooling and skills matching

Corradini, C. ORCID: https://orcid.org/0000-0002-1980-7993, Morris, D. and Vanino, E. (2025) Marshallian agglomeration, labour pooling and skills matching. Cambridge Journal of Economics. ISSN 1464-3545 doi: 10.1093/cje/beaf010 (In Press)

Abstract/Summary

Better skills matching has long been proposed as one of the key advantages of agglomeration economies. Yet, support for this improved matching has remained largely founded upon indirect proxies for skills such as wages and education. This paper contributes to the literature by offering novel empirical evidence on the relationship between specific measures of localised skills deficiencies and agglomeration economies, in the form of industrial density. Developing an instrumental variable approach and controlling for unobserved heterogeneity and other region-industry idiosyncratic effects across a panel dataset for the period 2009-2019 in England and Wales, our analysis reveals a positive effect of agglomeration economies in reducing both skills gaps within the employed workforce and skills shortages in the labour market external to the firm. We consider these findings in the context of persistent regional imbalances and the importance of strengthening skills provision within current regional industrial strategies.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/120867
Identification Number/DOI	10.1093/cje/beaf010
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Oxford University Press
Download/View statistics	View download statistics for this item