Agglomeration effects and unemployment to work: Evidence from French data

Abstract

In this work, we explore the role of agglomeration economies on unemployment-to-work transition rates in French employment areas. Mobilizing administrative exhaustive data files from individuals registered at the employment agency, we estimate local transition rates that are independent of differences in local characteristics of job seekers.Then, observed disparities between areas are explained by population density, our measure for agglomeration effects, and some demographic and labor market characteristics. We retain econometrics models considering spatial dependency for our dependent variable but also endogeneity of our main variable of interest. We find a negative relationship between population density and unemployment to work.