Access to Workers or Employers? An Intra-Urban Analysis of Plant Location Decisions
September 2010
Working Paper Number:
CES-10-21R
Abstract
This analysis attributes economies of agglomeration to either labor market pooling or employer-based productivity spillovers by distinguishing the effect of access to workers, measured by place-of-residence, from the effect of access to employers. New establishment location choices serve as a measure of productivity advantages, while census tract level data on access to same-industry employment, other-industry employment, and specialized workers, as well as metropolitan area fixed effects, measure sources of agglomeration and other locational characteristics. The four industries included are selected so that each relies on a workforce with a specialized occupation that is identifiable by place-of-residence, and that productivity and cost advantages are the primary drivers of location choice. The results show that both access to specialized workers and access to same-industry employers contribute to economies of agglomeration at an intra-urban spatial scale, and that the magnitude of the worker effect is large relative to employer-based productivity spillovers.
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regional,
establishment,
cluster,
location,
metropolitan,
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workforce,
locality,
urban,
town,
urbanization,
city,
relocation,
district,
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Metropolitan Statistical Area,
Center for Economic Studies,
Office of Management and Budget,
National Establishment Time Series,
Department of Economics,
Decennial Census,
Standard Occupational Classification,
North American Industry Classification System,
Public Use Micro Sample,
Census 2000,
Quarterly Census of Employment and Wages
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