Marshallian Labor Market Pooling: Evidence from Italy

43 Pages Posted: 16 Jul 2013

See all articles by Monica Andini

Monica Andini

Bank of Italy

Guido de Blasio

Bank of Italy

Gilles Duranton

University of Pennsylvania - Real Estate Department

William C. Strange

University of Toronto - Rotman School of Management

Date Written: July 12, 2013

Abstract

This paper employs a unique Italian data source to take a comprehensive approach to labor market pooling. It jointly considers many different aspects of the agglomeration – labor market relationship, including turnover, learning, matching, and hold up. It also considers labor market pooling from the perspective of both workers and firms and across a range of industries. Overall, the paper finds some support for theories of labor market pooling, but the support is weak. Specifically, there is a general positive relationship of turnover to local population density, which is consistent with theories of agglomeration and uncertainty. There is also evidence of on-the-job learning that is consistent with theories of labor pooling, labor poaching, and hold up. In addition, the paper provides evidence consistent with agglomeration improving job matches. However, the labor market pooling gains that we measure are small in magnitude and seem unlikely to account for a substantial share of the agglomeration benefits accruing to Italian workers and firms.

Keywords: local labor markets, matching, turnover, learning, hold-up, agglomeration

JEL Classification: R23, J60

Suggested Citation

Andini, Monica and de Blasio, Guido and Duranton, Gilles and Strange, William C., Marshallian Labor Market Pooling: Evidence from Italy (July 12, 2013). Bank of Italy Temi di Discussione (Working Paper) No. 922, Rotman School of Management Working Paper No. 2293884, Available at SSRN: https://ssrn.com/abstract=2293884 or http://dx.doi.org/10.2139/ssrn.2293884

Monica Andini

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Guido De Blasio (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Gilles Duranton

University of Pennsylvania - Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States

William C. Strange

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://www.rotman.utoronto.ca/%7Ewstrange/

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