Jasper Jacob Van Dijk (p)

Local traded-goods employment multiplier estimates play an important role in the decision making of local policy makers. Therefore, it is important to understand the robustness of the approaches and quality of the data used in empirical studies. The local employment multiplier estimates by Moretti (AER; 2010) are a good benchmark for departure. In this paper, I show that a permanent shock to employment in the traded sector of a Metropolitan Statistical Area in the United States has a multiplier effect of 2.01. This result is robust to two data sets, a range of controls and different ways of classifying traded industries. I compare estimates based on both Metropolitan Statistical Areas (MSAs) of residence and MSAs of work data, as well as two different instruments. Finally, I demonstrate the sensitivity of Moretti's results to six idiosyncrasies of his analysis.

Juan Soto (p), Vanessa Galeano-Duque

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Deniz Sevinc (p)

A limited number of academic studies explore the issue of skill gaps and any dampening effect on the UK economy. The problem with skills is that they are difficult to measure, decline or alter over time, may be employer specific, accredited versus unaccredited and reflect current demand in a local labour market. Understanding the relationship between regional economies and productivity requires an appreciation of regional assets, both hard and soft. A key asset is the quality and skills of the labour force within a travel-to-work area combined with an appreciation of employer demand; quality is difficult to measure but skill levels can be assessed using proxies based on accreditation, for example, national vocational qualifications (NVQs). The difficulty is in identifying the relationship between the available skilled population in a local labour market and actual or potential demand. This is not about employability or unemployment but in developing a technique that relates employer demand with current and near future supply in a local labour market. It is this challenge that is explored in this paper.
Our study aims at providing an in-depth analysis of skills gap, and provide a framework that covers England in addition to three main local enterprise partnership areas in West Midlands: Black Country, Greater Birmingham and Solihull and, Coventry and Warwickshire. The models are estimated over the period 2004:2020. The variables included in each region specific model are: a set of indicators to reflect the economic value of the government funded qualifications including government training, voluntary sector providers, colleges and private training providers and consist of different NVQ levels, economically active working age population (demography), and labour demand (current and projected) for twelve main sectors. Based on Labour Force Survey data we forecast supply of skills by NVQ levels in each local authority of economically active working age population, and based on economically active working age population forecasts we calculate absolute number of people with specific NVQ levels. A further module has been added in an attempt to provide useful information on possible labour market imbalances and skill mismatches in West Midlands. This module compares the skill demand and skill supply projections (focusing on qualifications) and attempts to reconcile the two.

Paula Herrera (p), Enrique López-Bazo, Elisabet Motellón

The existence of institutional arraignment or different wage structures may affect the way formal and informal workers are rewarded in the Colombian labor market, and therefore the prices that they perceived for their characteristics. For example, it is well known that the minimum wage is binding in the formal sector, meaning that a large proportion of formal workers earn a minimum wage, in contrast a large proportion of informal workers are paid a wage inferior to the minimum wage. This adds to the fact that the share of workers in the informal sector varies largely across Colombian regions. Thus, grouping formal and informal workers together may give misleading information about the origin of regional wage disparities.
Once the density of hourly wages is computed for formal and informal workers separately, the regional differences are less marked within each of these two groups of workers. As a matter of fact, Pacific region whose density distribution of hourly wages had a very dissimilar behavior compared to other regions for the whole sample, once formal and informal workers are treated separately, its behavior is more alike, especially in the case of formal workers. Undoubtedly, average hourly wages are different between regions, even after splitting the sample into formal and informal workers. However wage gaps are reduced considerably. By comparing formal workers from Pacific region to formal workers of Golden Triangle (Bogotá, Cali and Medellín) the average of gross hourly wages of the Pacific is 95% of that paid in Golden Triangle. When considering only informal workers, the wage gap of Pacific against Golden Triangle is also reduced, although to a lesser extent than when comparing formal workers. On the other hand, the wage gap for formal workers behaves in a different way along the wage distribution for each of the regions, while a non-monotonic behavior throughout the wage distribution is present for informal workers. Since the magnitude and the behavior of regional wage gaps of formal workers are different to those of informal workers, then treating formal and informal workers separately will a more complete understanding of regional wage gaps in a labor market characterized by a high degree of informality. In doing so this paper presents analyze regional wage gaps, but differentiating formal and informal workers. However, the focus is not to compare formal and informal workers, but to compare formal workers across regions and separately doing the same for informal workers.