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Marshallian agglomeration, labour pooling and skills matching

Carlo Corradini et al.

Cambridge Journal of Economics2025https://doi.org/10.1093/cje/beaf010article
AJG 3ABDC A
Weight
0.46

Abstract

Better skills matching has long been proposed as one of the key advantages of agglomeration economies. Yet, support for this improved matching has remained largely founded upon indirect proxies for skills such as wages and education. This paper contributes to the literature by offering novel empirical evidence on the relationship between specific measures of localised skills deficiencies and agglomeration economies, in the form of industrial density. Developing an instrumental variable approach and controlling for unobserved heterogeneity and other region-industry idiosyncratic effects across a panel dataset for the period 2009–2019 in England and Wales, our analysis reveals a positive effect of agglomeration economies in reducing both skills gaps within the employed workforce and skills shortages in the labour market external to the firm. We consider these findings in the context of persistent regional imbalances and the importance of strengthening skills provision within current regional industrial strategies.

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https://doi.org/https://doi.org/10.1093/cje/beaf010

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@article{carlo2025,
  title        = {{Marshallian agglomeration, labour pooling and skills matching}},
  author       = {Carlo Corradini et al.},
  journal      = {Cambridge Journal of Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1093/cje/beaf010},
}

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Evidence weight

0.46

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.37 × 0.4 = 0.15
M · momentum0.60 × 0.15 = 0.09
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.