Abstract

Considering the distribution of income, unemployment rates or productivity over Europe, for instance, discovers not just country differences but also regional disparities within each country. Several reasons serve to explain such disparities within the EU and its regions: the factor endowment with natural resources but also physical and human capital and its accumulation differs regionally which affects the industrial mix. Also the pure geographical location, the access to sea or the presence of a large international airport hub affect the regional performance. In the presence of transaction and trade cost concentration seems to be favourable which then leads to an uneven distribution of particular industries in space ending in regional disparities. There are many other explanations as well and it is fair to assume that there is a path dependency which makes some regions more prosperous than others.
Most of the reasons mentioned above are incompatible with perfect competition leading to imperfect markets and some of them are due to regionally localized externalities. Those regionally localized externalities form the background of this special session and especially the challenges for the regional labour market. Therefore the special session aims to answer the question to what extend do regional labour markets gain or lose in the presence of localized externalities.

We encourage submitting empirical papers to this special session that strongly focus on externality driven determinants affecting all aspects of regional labour markets in the light of employment and unemployment, income, wages and productivity or innovation capacity from an individual, firm or regional point of view.