Regional Population–Employment Dynamics Across Different Sectors of the Economy

25 Pages Posted: 1 Feb 2012

See all articles by Thomas de Graaff

Thomas de Graaff

Vrije Universiteit Amsterdam, School of Business and Economics

Frank G. van Oort

University of Utrecht

Raymond J.G.M. Florax

Purdue University; VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Date Written: February 2012

Abstract

An important subset of the literature on agglomeration externalities hypothesizes that intrasectoral and intersectoral relations are endogenously determined in models of local and regional economic growth. Remarkably, structural adjustment models describing the spatio‐temporal dynamics of population and employment levels or growth traditionally do not include intersectoral economic dynamics. This paper argues and shows that allowing for economic linkages across sectors in these models adds considerable value, especially in forecasting. An econometric model of population–employment dynamics, in which sectoral variations in economic development are explicitly taken into account, is applied to a large urban planning policy proposal in the Netherlands. The empirical analyses suggest that population dynamics are largely exogenous, population changes drive employment in particular in the industry and retail sectors, and employment in all sectors depends strongly on intersectoral dynamics. Intersectoral dynamics appear as important drivers of regional sectoral employment changes; they are even more important than population changes, and their effect shows up clearly even within the Dutch institutional context where strict regulatory housing and planning restrictions are enforced.

Suggested Citation

de Graaff, Thomas and van Oort, Frank and Florax, Raymond J.G.M., Regional Population–Employment Dynamics Across Different Sectors of the Economy (February 2012). Journal of Regional Science, Vol. 52, Issue 1, pp. 60-84, 2012, Available at SSRN: https://ssrn.com/abstract=1996906 or http://dx.doi.org/10.1111/j.1467-9787.2011.00753.x

Thomas De Graaff (Contact Author)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Frank Van Oort

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

Raymond J.G.M. Florax

Purdue University ( email )

West Lafayette, IN 47907-1145
United States
(765) 494-4300 (Phone)
(765) 494-9176 (Fax)

HOME PAGE: http://web.ics.purdue.edu/~rflorax/

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 444 6092 (Phone)
+31 20 444 6004 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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