What Attracts Human Capital? Understanding the Skill Composition of Interregional Job Matches in Germany

39 Pages Posted: 22 Sep 2006 Last revised: 26 Aug 2008

See all articles by Melanie Arntz

Melanie Arntz

ZEW – Leibniz Centre for European Economic Research

Date Written: 2006

Abstract

By examining the destination choice patterns of heterogenous labor, this paper tries to explain the skill composition of internal job matching flows in Germany. Estimates from a nested logit model of destination choice suggest that spatial job matching patterns by high-skilled individuals are mainly driven by interregional income differentials, while interregional job matches by less-skilled individuals are much more affected by regional differentials in job opportunities. Regional differentials in non-pecuniary assets slightly contribute to spatial sorting processes in Germany. Such differences in destination choices by skill level are partly modified by different spatial patterns of job-to-job matches and job matches after unemployment. Simulating job matching patterns in a scenario of economic convergence between eastern and western Germany demonstrates that wage convergence is the most effective means of attracting human capital to eastern Germany.

Keywords: interregional job matches, destination choice, human capital

JEL Classification: R23, J61, C35

Suggested Citation

Arntz, Melanie, What Attracts Human Capital? Understanding the Skill Composition of Interregional Job Matches in Germany (2006). ZEW - Centre for European Economic Research Discussion Paper No. 06-062 , Available at SSRN: https://ssrn.com/abstract=930320 or http://dx.doi.org/10.2139/ssrn.930320

Melanie Arntz (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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