There is a sizeable literature on the locational choices of firms and employees, and the impacts of their decisions at the regional level, mainly based on models of the Carlino/Mills (1987) type. The general conclusion from this strand of literature (Hoogstra, van Dijk, & Florax, 2005) seems to be that jobs follow people.
Evolutionary economic geography has awoken an interest in the question where new sectors come from, and we believe new people with new skills may be one of the
mechanisms. Microdata on individual firms and employees can be used to test whether employees choose to follow their firm to another region. We control for personal and job characteristics, and taking into account the commuting possibilities. In particular, we expect the presence of a (relatively cheap) company car to lead to longer commuting and less moving, thus providing evidence contrary to the famous core-periphery model of Paul Krugman (1991a), where commuting is not present, and peripheral regional economies can suffer from low transportation cost.
J61 (Geographic Labor Mobility • Immigrant Workers)
R23 (Regional Migration • Regional Labor Markets • Population • Neighborhood Characteristics)
Version 0.10 from July 2017 is available as a working paper at PEEG.