Abstract

We examine how the degree of industrial specialisation of local labour market areas (LLMAs) shapes the quality of the jobs they o er. Extending the literature that highlights the positive e ects of (Jacobsian) urbanisation economies on job quality, we explore whether (Marshallian) localisation economies, typically associated with industrial specialisation, yield similarly beneficial outcomes. In doing so, we contrast potential mechanisms that may enhance job quality with others that could hinder it, acknowledging the more ambivalent implications of local specialisation for workers’ well-being. We investigate this question in the context of Emilia-Romagna, one of the most iconic regions in Italy for its dense network of industrial districts. Leveraging firm census data (ASIA-ISTAT) and administrative labour market data (LEED), we assess the relationship between job quality in LLMAs and their degree of industrial specialisation, employing a novel Bartik-style instrumental variable approach. Referring to di erent job quality dimensions, we find that higher specialisation is significantly associated with a greater incidence of nonstandard and low-skill jobs, and with a lower share of high-skilled and graduate employment. This pattern suggests that, in EmiliaRomagna, more specialised LLMAs may be following a “low road” development strategy that relies less on highly educated labour and o ers lower-quality employment opportunities.

Key-words: variety, employment patterns, job quality, regional economics, specialization

JEL Codes: 018, J21, R12