Productivity and Local Workforce Composition

  • David Christopher MaréEmail author
  • Richard Fabling
Part of the Advances in Spatial Science book series (ADVSPATIAL)


This chapter examines the link between firm productivity and the population composition of the areas in which firms operate. We combine annual firm-level microdata with area-level workforce characteristics obtained from population censuses. Overall, the results confirm the existence of agglomeration effects that operate through local labour markets. We find evidence of productive spillovers from operating in areas with high-skilled workers, and with high population density. The strength and nature of spillovers varies across different types of firms. Our findings demonstrate the importance of controlling for multiple dimensions of local workforce composition, and of analysing effects for subpopulations of firms.


Productivity Agglomeration Workforce composition 



We thank the editors, Riccardo Crescenzi and Marco Percoco, for encouraging our contribution, and for comments on an earlier draft. This work has been partially funded as part of the New Zealand Department of Labour’s Economic Impacts of Immigration research programme. Thanks to participants at the CRENoS/University of Southampton workshop on “Determinants and Effects of Interregional Mobility”, and the 2010 ERSA Congress, and to Steve Stillman for comments on earlier versions of this paper. Access to the data used in this study was provided by Statistics New Zealand in accordance with security and confidentiality provisions of the Statistics Act 1975 and the Tax Administration Act 1994. The results in this paper have been confidentialised to protect individual businesses from identification. See Maré and Fabling (2011) for the full disclaimer.


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© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Motu Economic and Public Policy Research and University of WaikatoWellingtonNew Zealand
  2. 2.Motu Economic and Public Policy ResearchWellingtonNew Zealand

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