Labour mobility and plant performance in Denmark: the significance of related inflows
Bram Timmermans, Ron Boschma
Last modified: 2010-05-27
Abstract
This paper investigates the impact of different types of labour mobility on plant performance, making use of the IDA-database that provides detailed information on all individuals and plants for the whole of Denmark. Our study shows that the effect of labour mobility can only be assessed when one accounts for the type of skills that flow into the plant, and the degree to which these match the existing set of skills at the plant level. As expected, we found that the inflow of skills that are related to the set of skills in the plant impacts positively on plant performance, while inflows of skills that are similar or unrelated to the existing set of skills in the plant have a negative effect on plant performance. Moreover, intra-regional skilled labour mobility had a negative effect on plant performance more in general, while the effect of inter-regional labour mobility depends on the type of skills that flow into the plant. In these analyses, we used a sophisticated indicator of revealed relatedness that measures the degree of skill relatedness between each pair of sectors on the basis of the intensity of labour flows between sectors. We made the same estimations using the more common NACE-based skill relatedness indicator. Although our main findings remained the same, we found that our revealed relatedness indicator generated stronger levels of significance.
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