Lourens Broersma, Jan Oosterhaven, Faculty of Economics, University of Groningen, Groningen, The Netherlands
A Decomposition of Regional Labour Productivity in The Netherlands - Sector Structure and Localisation Economies (assigned to theme
This paper shows that regional differences in labour productivity can be decomposed into (1) differences due to differences in sector structure, (2) differences due to economies of localisation, i.e. the advantage or disadvantage of being specialized in certain clusters of industry, and (3) the remaining productivity difference at the level of the individual industry (i.e. the weighted average sector in the region at hand). The decomposition is applied to the regional differences in labour productivity level as well as to the regional differences in labour productivity growth. Both analyses are done empirically using unique Dutch yearly labour productivity data for 40 labour market regions for the period 1990-2001, with a sector classification of about 20 industries. Differences in sector structure are shown to account for about a quarter of these differences. Localisation economies predominately prove to be positive and account for a quarter of the differences in levels and a third of the differences in growth.
 | Conference organized through conf-vienna
(copyright Gunther Maier) |