Labour mobility and local employment: building a local employment base from labour mobility?

Labour mobility and local employment: building a local employment base from labour mobility? Regional Studies. Do labour inflows contribute to job opportunities for local residents? This question is analysed based on a three-step instrumental variables (IV) estimation procedure including two-way fixed effects to control for unobserved heterogeneity by using unique panel data for the period 2006–11 in Denmark. The results show that labour inflows are crucial for employment opportunities in peripheral areas, but appear to have no effects closer to urban centres. Furthermore, the findings highlight the importance of inflows of specific skills and cross-sectoral dependencies in skill dynamics. This stresses the importance of considering policies promoting mobility to ensure the employment basis in peripheral areas.