The Swedish economy has undergone substantial structural change over last three decades. Overwhelming forces of ‘creative destruction’, technological progress and tertiarisation of the economy led to dramatic changes in Swedish industrial landscape which boosted economic development, while at the same time posing many challenges for policy-makers. Some of the most important challenges regard labour market dynamics in times of economic restructuring, and in particular, issues connected to labour mobility across regions, sectors and labour market states.
In my dissertation project preliminary titled “Structural change and labour mobility: A co-evolutionary perspective” I’m addressing the lack of systematic discussion in the literature regarding the effects of the long-term evolution of regional economy on the regional labour market dynamics.
Using a unique combination of Swedish datasets, my research project is centred on two overarching research questions. The first is: in what ways is a co-evolutionary dynamics of industrial restructuring and labour mobility patterns across and within local labour markets conditioned by technology-induced structural change?
By investigating this question it is possible to contribute to the long-standing debate on a role of labour mobility as an adjustment mechanism to existing regional disparities. In a stylised version, the two positions in the literature are that: (1) labour mobility leads to income and employment convergence across regional labour markets over time, and (2) labour mobility reinforces regional labour market imbalances. In an attempt to address this debate I formulate the second general question: does labour mobility act as an effective mechanism of adjustment to economic shocks in the long run?
Answering the latter question for the Swedish case is of particular value, as it poses explicit policy implications. Indeed, if labour mobility leads to smoothing of imbalances across local labour markets, policy measures should be aimed at stimulating workers to be mobile. If this is not the case, policies motivating workers to stay in the region of current employment should be preferred. The outcomes of my project will better inform policy-makers on the relation between magnitude and character of labour mobility needed for sustaining equality across local labour markets, while endorsing higher rates of industrial renewal and economic growth.
In addressing the issues mentioned above I try to bridge three strands of research which until now developed almost independently of each other, namely (1) macro-oriented view on evolutionary economic geography, in particular the geographic reference cycle model; (2) labour economics’ perspective on labour mobility as economic shocks absorption mechanism; and, (3) skill-relatedness and industry space theses uncovering skill-specific component of labour mobility.