The Dynamics of Local Employment in France

Arbeitspapier

We study the impact of local economic structure on employment dynamics. Local employment is decomposed into the product of the average plant size and the number of plants in the area and industry. We estimate the dynamics of both components simultaneously using French yearly data on 36 industries and 341 areas between 1984 and 1993. The careful specification of short-run dynamics and the control for fixed effects and endogeneity are shown to be critical in the empirical model. First, static externalities are prevalent compared to dynamic ones. Moreover, whereas area-and-industry effects explain most of the spatial variation of plant size, the local number of plants is mainly driven by the current local economic structure. Policies targeted towards plant creation should thus be more efficient. For instance, large areas endowed with a small number of even size industries have both more and larger plants. A large number of plants heterogeneous in size increases the average plant size, but the number of plants is higher when plants have similar size.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 1061

Classification and Topics

• Classification: Wirtschaft ; Labor Force and Employment, Size, and Structure ; Labor Demand ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: labor market ; panel data ; economic geography ; employment ; Regionaler Arbeitsmarkt ; Regionale Industriestruktur ; Regionales Wachstum ; Frankreich

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Combes, Pierre-Philippe ; Magnac, Thierry ; Robin, Jean-Marc
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/20296
• Last update: 10.03.2025, 11:45 AM CET