Abstract
In this paper we employ data on 156,000 workers working within the Finnish high-tech industries in order to identify the extent to which labour mobility between sectors and regions is influenced by the characteristics of the locality in which the worker works. With these data we are able to estimate different types of binary, multinomial and ordered logit models to capture different types of inter- or intra-sector or region employment mobility. As we will see the different categories of employment mobility are influenced by different factors such that we cannot simply talk about ‘labour mobility’, but rather need to be specific regarding each particular form of employment mobility. Our results show that urbanisation and industrial diversity are not just associated with greater intra-regional mobility, as is emphasised by the agglomeration literature, but also greater inter-regional mobility.
Similar content being viewed by others
Notes
In Finland high-tech firms and their success in international markets has been an engine of economic growth over the past two decades. The strong growth of information and communication technology cluster in the 1990s (led by Nokia Corporation) made Finland internationally known as a small technology-intensive economy where economic growth is mainly based on technology know-how. The strong high-tech sector had an extremely important role especially in early 1990s when the Finnish economy was recovering from deep recession. For instance in 2008, the share of high-tech sector was about 6 % (in 1989 3.6 %) of the total labour force and almost 18 % of the total export (in 1991, 6 %).
We exclude the workers who left the high-tech sector in 2005 and employees who entered to the high-tech sector in 2006. So we are analysing the labour mobility within the high-tech sector, both across industries and regions in 2005–2006. The data, on level of detail we have available in terms of sectoral-spatial movements, do not include individual level information. Therefore, we have adopted this particular estimation strategy. Instead of using sample of the total data, as it is the case in most of studies which use the individual data, our data covers all the high-tech workers in Finland in year pair 2005–2006.
The general labour mobility values are based on the data which cover 71 regions and 1,441,298 employees in a year pair 2005–2006. All the values presented in Table 1 are based on region-specific values, and for instance, they do not show the variance across regions. As a comparison to these figures approximately 3–3.5 % of the total population migrated between the sub-regions in Finland (average per year over the period of 1996–2006) (Nivalainen 2010).
Because we do not have information about the regional wages of the high-tech sector in all 71 regions, the number of regions used in estimations is 64.
More information about the definition of high-tech sectors. See Eurostat Pocketbooks (2011): science, technology and innovation in Europe.
Using the median wage overcomes the problem that some dominant regions may skew the average wage significantly, although we find that in the case of Finnish high-tech sectors the average value is very close to the median value. We use nominal values because of the lack of real values.
The difference between commonly used Herfindahl–Hirschmann index (HHI) and Shannon index is that the HHI assigns higher weights to the largest branches than does the Shannon index. Therefore, the value of HHI is largely driven by the share of the dominant branch, whereas the value of the Shannon index depends more strongly on shares of several industries. Therefore, it reflects more accurately the variety of the high technology sector in terms of how many industries, including even small ones, are present in a region (Aiginger and Davies 2004; Simonen et al. 2014). The maximum value of the Shannon index is ln(m). In this case all high-tech branches are present in a particular region and employment is evenly distributed within these branches.
Eriksson et al. (2008) have argued that in smaller regions (where the number of firms is pretty low in general) firms probably know and meet each other more frequently. This can promote intra-regional labour mobility as firms view workers from other local companies more attractive because of their local knowledge of norms and routines.
Unfortunately we do not have data available to measure the concentration of workplaces and use that as a proxy for urbanisation.
This variable is not measured as a difference to the regional average but our tests demonstrate that it does not matter whether we use difference values or levels values.
We have checked how the possible correlations between the independent variables affect results. Various estimation results show that results and conclusions remain the same as shown in this paper. For instance, results do not change significantly if we leave, e.g. “the number of high-tech establishments” variable away from the estimations. We also ran the reduced form estimations, where we left variables out one by one (based on p-values) and all variables which are statistically significant stay significant and their signs do not change.
If the estimate of dispersion after fitting (measured by the deviance or Pearson’s chi-square divided by the degrees of freedom) is \({>}1\), then we have reason to believe that data might be overdispersed. Without adjusting for the overdispersion, the standard errors are likely to be underestimated, causing the Wald tests to be too very sensitive. The only thing which will be different to the normal formation of point estimates (when we control the overdispersion) is that we shall make all conclusions little bit more cautiously since we scale the standard errors upwards.
The average marginal effects of the variables on probability of changing the region as well as the marginal effect at the mean values of the variables are presented in the “Appendix” (Table 9).
The average marginal effects of the variables on probability of changing the sector and the marginal effect at the mean values of the variables are presented in the “Appendix” (Table 10).
Because of technological specificities, we assume that switching sector is more difficult than changing regional location, thereby justifying the ranking of our categories 3 and 4. Moreover, this is also borne out by the numbers of actual movements, with inter-regional movements between firms within the same high-tech sector outnumbering employment movements between firms in different sectors but within the same region.
References
Aiginger K, Davies SW (2004) Industrial specialization and geographic concentration: two sides of the same coin? Not for the European Union. J Appl Econ 7:231–248
Almeida P, Kogut B (1999) Localisation of knowledge and the mobility of engineers in regional networks. Manag Sci 45:905–917
Arita T, McCann P (2000) The spatial and hierarchical organization of Japanese and US multinational semiconductor firms. J Int Manag 8:121–139
Audretch DB, Feldman M (1996) R&D Spillovers and the geography of innovation and production. Am Econ Rev 86:630–640
Audretsch DB, Stephan PE (1996) Company-scientist locational links: the case of biotechnology. Am Econ Rev 86:641–652
Angel DP (1991) High-technology agglomeration and the labor market: thecase of Silicon Valley. Environ Plan A 23:1501–1516
Beaudry C, Schiffauerova A (2009) Who’s right, Marshall or Jacobs? The localization versus urbanization debate. Res Policy 38:318–337
Biagi B, Faggian A, McCann P (2011) Long and short distance migration in Italy: the role of economic, social and environmental characteristics. Spat Econ Anal 6:111–131
Bleakley H, Lin J (2007) Thick-market effects and churning in the labour market: Evidence from U.S. cities. Federal Reserve Bank of Philadelphia, working paper 07-23
Blomquist GC, Berger MC, Hoehn JP (1988) New estimates of quality of life in urban area. Am Econ Rev 78:89–107
Boschma R, Eriksson R, Lindgren U (2009) How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity. J Econ Geogr 9:169–190
Carnoy M, Castels M, Benner C (1997) Labour market and employment practises in the age of flexibility: a case of Silicon Valley. Int Labour Rev 136:27–48
Collett D (2003) Modelling binary data, 2nd edn. Chapman & Hall, London
De La Roca J, Puga D (2014) Learning by working in big cities. Discussion paper 9243, Centre for Economic Policy Research
Di Addario S (2011) Job search in thick markets. J Urban Econ 69:303–318
Duranton G, Puga D (2004) Micro-foundations of urban agglomeration economies. In: Henderson V, Thisse J-F (eds) Handbook of regional and urban economics, vol 4. Elsevier, Amsterdam, pp 2063–2117
Duranton G, Puga D (2001) Nursery cities: urban diversity, process innovation, and the life-cycle of products. Am Econ Rev 91:1454–1477
Eriksson R, Lindgren U, Malmberg G (2008) Agglomeration mobility: effects of localisation, urbanisation, and scale on job changes. Environ Plan A 40:2419–2434
Eurostat Pocketbooks 2011: Science, technology and innovation in Europe. Published by Publications Office of the European Union
Fallick B, Fleischman CA, Rebitzer JB (2006) Job hopping in silicon valley: some evidence concerning the micro-foundations of a high technology cluster. Rev Econ Stat 88(3):472–481
Finnie R (2004) Who moves? A logit model analysis of inter-provincial migration in Canada. Appl Econ 36:1759–1779
Florida R (2002) The economic geography of talent. Ann Assoc Am Geogr 92:743–775
Fingleton B (2003) Increasing returns: evidence from local wage rates in Great Britain. Oxf Econ Pap 55:716–739
Frenken K, van Oort F, Verburg T (2007) Related variety, unrelated variety and regional economic growth. Reg Stud 41:685–697
Glaeser EL, Maré DC (2001) Cities and skills. J Labor Econ 19:316–342
Glaeser EL, Kolko J, Saiz A (2001) Consumer city. J Econ Geogr 1:27–50
Gottlieb PD (1995) Residential amenities, firm location and economic development. Urban Stud 32:1413–1436
Graves P (1976) A re-examination of migration, economic opportunity, and the quality of life. J Reg Sci 12:107–112
Graves P (1980) Migration and climate. J Reg Sci 20:227–237
Graves P (1983) Migration with a composite amenity: the role of rents. J Reg Sci 23:541–546
Greenwood MJ (1975) Research on internal migration in the United States: a survey. J Econ Lit 13:397–433
Greenwood MJ (1985) Human migration: theory, models and empirical studies. J Reg Sci 25:521–544
Greenwood MJ, Hunt G (1984) Migration and interregional employment redistribution in the United States. Am Econ Rev 74:957–969
Gyourko J, Tracey J (1991) The structure of local public finance and the quality of life. J Polit Econ 99:774–806
Hansen HK, Niedomysl T (2009) Migration of the creative class: evidence from Sweden. J Econ Geogr 9:191–206
Hanson GH (2000) Firms, workers, and the geographic concentration of economic geography. In Clark G, Gertler M, Feldmann M (eds) The Oxford handbook of economic geography, pp 477–495. Oxford University Press, Oxford
Herzog HW, Schlottmann AM, Johnson DL (1986) High technology jobs and worker mobility. J Reg Sci 26:445–459
Jorgensen DW, Timmer MP (2011) Structural change in advanced nations: a new set of stylised facts. Scand J Econ 113(1):1–29
Kim S (1987) Diversity in urban labor markets and agglomeration economics. Pap Reg Sci Assoc 62:57–70
Kotkin J (2000) The new geography. Random House, New York
Lawton-Smith H, Waters R (2005) Employment mobility in high-technology agglomerations: the cases of Oxfordshire and Cambridgeshire. Area 37(2):189–198
McCann P, Simonen J (2005) Innovation, knowledge spillovers and local labour markets. Pap Reg Sci 84:465–485
Mukkala K (2008) Knowledge spillovers: mobility of highly educated workers within the high technology sector in Finland. In: Poot J, Waldorf B, van Wissen L (eds) Migration and human capital. Edward Elgar Publishing, Cheltenham, pp 131–149
Muth R (1971) Migration: chicken or egg? South Econ J 37:95–306
Neffke F, Henning M, Boschma R (2011) How do regions diversify over time? Industry relatedness and the development of new growth paths in regions. Econ Geogr 87(3):237–265
Nivalainen S (2010) Essays on family migration and geographical mobility in Finland. PTT Publications 21. Pellervo Economic Research, Helsinki, Finland
Partridge MD (2010) The duelling model: NEG vs amenity migration in explaining US engines of growth. Pap Reg Sci 89:513–536
Power D, Lundmark M (2004) Working through knowledge pools: labour market dynamics, the transfer of knowledge and ideas, and industrial clusters. Urban Stud 41:1025–1044
Rogers E, Larsen J (1984) Silicon valley fever. Basic Books, New York
Rosenthal SW, Strange WC (2004) Evidence on the nature and sources of agglomeration economies. In: Henderson JV, Thisse JF (eds) Handbook of regional and urban economics, vol 4. Elsevier, Amsterdam, pp 2119–2171
Saxenian A (1994) Regional advantage: culture and competition in silicon valley and route 128. Harvard university press, Cambridge
Scott AJ (1988) Metropolis. University of California Press, Berkeley
Scott AJ (2010) Jobs or amenities? Destination choices of migrant engineers in the USA. Pap Reg Sci 89:43–63
Scott A, Storper M (1990) Work organization and local labour markets in an era of flexible production. Int Labour Rev 129:573–591
Simonen J, Svento R, Juutinen A (2014) Specialisation and diversity as drivers of economic growth: evidence from high-tech industries (early view in papers in regional science)
Simonen J, McCann P (2008) Firm Innovation: the Influence of R&D cooperation and the geography of human capital inputs. J Urban Econ 64(1):146–154
Simonen J, McCann P (2010) Knowledge transfers and innovation: the role of labour markets and R&D cooperation between agents and institutions. Pap Reg Sci 89:295–309
Timmermans B, Boschma R (2014) The effect of intra-and inter-regional labour mobility on plant performance in Denmark: the significance of related labour inflows. J Econ Geogr 14:289–311
Acknowledgments
The authors are grateful for valuable suggestions from two anonymous referees and financial support from the Academy of Finland and Yrjö Jahnsson foundation. Previous versions of this paper were presented at 53rd Congress of the European Regional Science Association, Palermo, Italy, 2013, and at 42nd annual conference of the Regional Science Association International - British and Irish Section, Sidney Sussex College, University of Cambridge, August, 2013.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Simonen, J., Svento, R. & McCann, P. The regional and sectoral mobility of high-tech workers: insights from Finland. Ann Reg Sci 56, 341–368 (2016). https://doi.org/10.1007/s00168-016-0742-0
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00168-016-0742-0