How people and jobs find each other: Micro-level spatial adjustment mechanisms between human capital supply and demand

Morkute, G., 2017, [Groningen]: University of Groningen. 200 p.

Research output: ThesisThesis fully internal (DIV)Academic

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  • Gintare Morkute
Modern economies require high levels of human capital as dictated by the proliferation of information technology and increased competition. They also have high levels of human capital available to them as evident from rising education levels of employees. As a result, efficient matching of human capital to the right economic activity has become crucial for competitiveness of firms and regions alike. At the same time, there are significant costs involved in employers and employees learning about each other and accessing each other.

This thesis finds that labour market participants are embedded in their local environment and that geographical distance is an important obstacle to the adjustments of employers and employees alike. The results demonstrate that human capital availability affects job creation by local firms but not job relocation by nonlocal firms. The suggested explanation for the local character of firm adjustments is that labour market information is primarily accessed in the local environment and through face-to-face interactions. Similarly, it is suggested that employees accumulate knowledge of their immediate working environment which aids them in subsequent local job search. As a result, employees demonstrate a substantial stickiness to their working locations. Yet also in an aspatial setting the efficient use of human capital is hindered by employers’ having limited information about job applicants’ ability and relying on signals.

In conclusion, accurate labour market information is not easily accessible to both firms and people. Both sides tend to react to cues and readily available knowledge, imperfect as they may be. Local characteristics are important in shaping labour market decisions and both employers and employees appear to be spatially myopic.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
Award date21-Dec-2017
Place of Publication[Groningen]
Print ISBNs978-94-034-0214-7
Electronic ISBNs978-94-034-0213-0
Publication statusPublished - 2017

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