Working Paper No. 1352

Mysteries of the Trade? Skill-Specific Local Agglomeration Economies

Published: August 31, 2020Pages: 26Keywords: Agglomeration economies; Wages; Spillovers; Attenuation; Clusters; Economic proximity; RelatednessJEL-codes: R10; R12; J24

Mysteries of the Trade? Skill-Specific Local Agglomeration Economies Martin Andersson and Johan P Larsson

Using longitudinal Swedish data, we document robust evidence of highly local spillovers between individuals in similar occupations. The results are consistent with the existence of knowledge spillovers between workers performing similar work tasks in the same city-district. We further demonstrate less distance-sensitive benefits of working in diverse districts and regions, characterized by high density of employees in other occupations. The diversity benefits exist only in metropolitan areas and pertain to workers performing advanced services or non-routine work tasks.


Andersson, Martin and Johan P Larsson (2020), "Mysteries of the Trade? Skill-Specific Local Agglomeration Economies". IFN Working Paper No. 1352. Stockholm: Research Institute of Industrial Economics (IFN).

Martin Andersson


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Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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