Does spatial employment density spur inter-firm job switching?
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Inter-firm job switching of workers is a much cited but seldom measured source of the productivity advantages of spatial employment density. It has been advanced as a conduit for localized knowledge flows as well as labor market matching efficiency. Using a matched employer–employee dataset for Sweden, we estimate the influence spatial employment density has on the probability of inter-firm job switching of private sector workers. Our estimates suggest that a doubling of employment density per square kilometer increases the probability that a random worker switches employer by 0.2 % points. The same effect is substantially higher for more skilled workers. While the effect of a doubling of density is limited, the actual differences in density across the regions in our data amount to a factor over 40, rendering differences in density an important explanation for regional variations in rates of inter-firm job switching.
JEL ClassificationJ61 J62 R12 R11
Martin Andersson acknowledges financial support from the Swedish research council FORMAS and from the EU sixth framework program (MICRODYN project). We are grateful for useful comments from seminar participants at the Jönköping International Business School, the Royal Institute of Technology and the DIME workshop on Regional Innovation and Growth at the University of Pécs in Hungary, April 2011.
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