The creative class: do jobs follow people or do people follow jobs?

Accepted manuscript version. Published version available in Regional Studies, DOI: 10.1080/00343404.2016.1254765 Regional adjustment models are applied to explore causal interaction between two types of people distinguished by educational attainment, and two types of jobs: creative class jobs and other jobs. Data used are for labour market regions in Finland, Norway and Sweden from the 2000s. Creative class jobs follow people with high educational attainment (one way causation), but creative class jobs also follow other jobs and vice versa (circular causation). The results suggest that stimulating creative class job growth could be accomplished through attracting people with higher educatio…

Kysyntä- vai tarjontavetoinen aluekasvu? Aluetalouksien kehitys Suomessa 1990-2010

Artikkelissa kysytään, onko aluekasvu tarjonta- vai kysyntävetoista. Seuraavatko ihmiset työpaikkoja vai syntyykö työpaikkoja alueille, jossa ihmiset haluavat asua? Suomen aineistolla tehty koko työikäistä väestöä koskeva tilastollinen analyysi viittaa siihen, että 1990-luvun laman jälkeisenä kasvuperiodina 1994–2007 ihmiset seurasivat työpaikkoja. Päinvastainen tulos saatiin, kun väestömuuttujana käytettiin korkeasti koulutettua väestöä. Silloin työpaikat näyttävät seuranneen (korkeasti koulutettuja) ihmisiä. 1990-luvun laman aikana tilanne oli toisin. Koko aineistolla estimoituna työpaikat eivät seuranneet väestöä, eikä väestö seurannut työ- paikkoja. Korkeasti koulutetut sitä vastoin näy…

Regional Policy Lessons from Finland

The Finnish economy and society has long been dominated by primary production. Post-war economic development was rapid and welfare gaps between the much more developed economies and Finland narrowed and were even partly reversed. Rapid economic expansion together with structural change has had the effect of centralizing both economic activity and population. The trend has been towards the southern and central regions where the metropolitan area of Helsinki and most of the other larger towns and urban centres are located. Together with vigorous technological progress in agriculture and forestry the rapid urbanization and industrialization of the 1960s and 1970s the fastest in Europe altered …

Does the compositional effect explain the association between rates of in-migration and out-migration?

A common empirical observation obtained in many countries is that regions with a high gross out-migration per capita also tend to have a high gross in-migration per capita, and vice versa. Another common and curious observation is a positive correlation between out-migration rate and net-migration rate. This has been interpreted to mean that out-migration is independent of the economic characteristics of the region. A number of explanations has been suggested to explain the positive relationship between the rates of out-migration and in-migration. According to the compositional effect- explanation, a region that attracts migrants grow to have a population which is more migration prone, thus…

Persistence and turnover in regional unemployment disparities

PEHKONEN J. and TERVO H. (1998) Reg. Studies, 32 , 445-458, Persistence and turnover in regional unemployment disparities. This study investigates persistence and turnover in regional unemployment disparities in Finland by examining time-series data on 10 labour districts and 423 municipalities. The data on the labour districts indicates that regional unemployment disparities are rather persistent and that steady-state unemployment rates differ considerably across the districts. The results on the municipality level data, however, suggest the presence of substantial intra-distribution dynamics and that the degree of persistence is less profound than the labour district data indicates. In al…

Lähtö- ja tulomuuttoa kaupungistuvassa Suomessa

Factors underlying displacement: an analysis of Finnish regional incentive policy using survey data on assisted firms

Estimating regional differences in the utilization of labour resources

This paper introduces a method for the analysis of regional differences in the utilization of labour resources. The method developed is a version of ‘components-of-change’ analysis in which labour force utilization in each regional labour market is compared with the sitation of a labour market with the highest level of utilization. The aggregate measure is split up into three components: open (registered) unemployment, hidden unemployment and underemployment. The effects of structural factors on aggregate differences are also estimated. In the empirical section the situation of Finnish provinces in 1989 is analysed within the framework developed. The results indicated the existence of large…

Self-employment dynamics in rural and urban labour markets

Only few in-depth studies of the alternation between different labour market states have been published. This paper deals with the alternation between self-employment, paid-employment and non-employment in Finland in 1987-1999, paying special attention to differences in self-employment dynamics between areas characterized by different labour market conditions, viz. rural and urban locations. The analysis is based on a one-percent random sample drawn from panel data on the census and longitudinal employment statistics. The results show differences in the transition processes between the three labour market states by the type of area. The results suggest that alternation between different emp…

Cities, hinterlands and agglomeration shadows: Spatial developments in Finland during 1880–2004

Abstract This paper analyzes long-term spatial developments in Finland by focusing on two predictions of the new economic geography (NEG) models: the increasing persistence of locational patterns and the rising dominance of growth centers. The empirical analysis is based on regional population data from 1880 to 2004. The results support the hypotheses. Evolutions in rank and rank-size distributions during the processes of industrialization and urbanization suggest increasing persistence of regional structures. The analysis of causal processes between population centers and their hinterlands shows that these regions grew hand-in-hand in the pre-war period, whereas agglomeration shadows start…

A Micro-Level Approach to the Analysis of the Displacement Effects of Regional Incentive Policy: The Case of Finland

TERVO H. (1989) A micro-level approach to the analysis of the displacement effects of regional incentive policy: the case of Finland, Reg. Studies 23, 511–521. This paper analyses the impact of regional incentive policy from the point of view of efficiency. Contrary to usual practice, a micro-level approach is used. Four possibilities for displacement effects to arise are proposed: displacement may be either direct or indirect and simultaneously directed either at existing or ‘potential’ production. The empirical results concerning the situation of Finland suggest that regional policy has been more than a zero-sum game between the assisted and non-assisted areas during the period 1975–81. T…

Self-employment duration in urban and rural locations

Previous research has shown that local environment is important for self-employment. Self-employment dynamics varies between areas characterized by different labour market conditions, entrepreneurial tradition and other structural factors. Alternation between different labour market states (self-employment, paid-employment, non-employment) is also likely to increase if employment opportunities remain low in local labour market markets. This paper analyses the factors influencing the duration of self-employment spells in Finland with a large registered-based data set from the period of 1987-2002. It is evident that rates of exit out of self-employment and the length of self-employment spells…

Do People Follow Jobs of Do Jobs Follow People? : The Case of Finland in an International Context

Traditionally, people are believed to follow jobs; however, a contradictory view that jobs follow people has also gained popularity. In this study, two methods are used to analyze regional growth processes in Finland between 1990 and 2010, and the results are compared with the findings obtained elsewhere. In accordance with the results from many countries, the conventional regional adjustment model shows that people have largely followed jobs in Finland, i.e., that regional growth is demand induced. A closer examination suggests, however, that highly educated people drive regional change in Finland and that economic fluctuations also have an effect. Another approach, based on the Granger ca…

Regional differences in migratory behaviour in Finland

The paper aims to analyse regional differences in migration behaviour and labour market adjustment in Finland. The analysis focuses on individuals belonging to the labour force both in 1985 and 1990. The data is a one percent sample from the Finnish longitudinal census file. Three outcomes can be deduced from the results. First, the chosen regions differ from each other quite little by migratory behaviour. Second, regional migratory behaviour has an equilibrating role in regional labour markets, which is not very strong. Third, the effect of personal unemployment on migratory behaviour is weaker in northern Finland and so the future prospects of high-unemployment areas are further worsening.

The nature of self-employment: how does gender matter?

This paper analyses female and male entrepreneurship and the differences between them in Finland. The female self-employment rate is clearly lower than that of male self-employment in Finland. The paper shows that differing behaviour accounts for differing rates of self-employment between females and males. The predicted earnings differential between self-employment and paid employment has a divergent effect on the probabilities of self-employment. For males, it is positive (as expected). For females, it has no effect, which accentuates the other motives they have for self-employment. Both spouse and family are found to have bigger effects on female self-employment than on male self-employm…

Who Moves to Depressed Regions? An Analysis of Migration Streams in Finland in the 1990s

Depressed regions typically lose a large number of migrants but simultaneously are destination regions for some migrants. This study analyzes those people who decided to move to depressed regions in Finland in 1993-1996. The analysis is based on a 1 percent sample drawn from the Finnish longitudinal census. The results show that migration into depressed regions is also a selective process. Return migration is only one part of this migration. However, the more educated an individual is, the more likely she or he is to move to a flourishing region. The process of concentration of human capital is reinforced by interregional migration.

Regional unemployment, self-employment and family background

This paper analyses the role of regional unemployment on self-employment. The paper argues that family background separates individuals with respect to the effect of unemployment. The empirical analysis is based on data on a sample of Finnish residents aged 0–14 years in 1970 whose subsequent employment is examined. The results show that high unemployment in a region pushes individuals from self-employed families into self-employment, while it has the opposite effect on individuals from wage earner families. The push effect seems to work only among those individuals who already have entrepreneurial skills through their family background. peerReviewed

Intergenerational mobility in self-employment: a regional approach

Self-employment is an important option in the work careers of many. It may be seen as a learning process illustrated for example in the social development model by Gibb and Ritchie (1982) and in the model of entrepreneurial careers by Dyer (1994). In the former, entrepreneurship is mainly seen in terms of the situations which individuals encounter and the social groups to which they relate. Among many others, family background, education and work experience have an effect directly, or indirectly through intentions (see Krueger and Carsrud 1993)on becoming self-employed. The children of parents owned a business are more likely to see such a career as more acceptable than working for someone …

Centres and peripheries in Finland: Granger causality tests using panel data

Abstract Despite their importance from a policy point of view, empirical studies on the effects of growth centres in their regions are rare. This paper analyses mutual relationships between growth processes in centres and their surrounding hinterlands in 19 Finnish regions. Annual population data from the period 1970–2004 are used. A novel testing procedure based on an extension of the Granger causality definition in a panel data context is applied. Heterogeneity between regions is allowed. Both the homogeneous non-causality hypothesis and the homogeneous causality hypothesis are rejected. Causal processes prove to be heterogeneous. Causality from centres to peripheries is found for nine re…

MIGRATION OF THE HIGHLY EDUCATED: EVIDENCE FROM RESIDENCE SPELLS OF UNIVERSITY GRADUATES*

We examine the inter-regional migration of university graduates from 1991 to 2003 in Finland. The results show that time matters: two-years before and during the graduation year the hazard rates of migration increase, and then decrease thereafter. Although university graduates are particularly mobile, we find that most of them do not move from their region of studies within 10 years after graduation. The out-migration, i.e., brain drain, is much higher among graduates in the more peripheral universities than in the growth centers (Helsinki in particular). Migration is also substantially more likely for those studying away from the home region than for those studying at home. peerReviewed

Regional differences in returns to education for entrepreneurs versus wage earners

Many studies suggest that rates of return to schooling are lower for entrepreneurs than for employees, although the opposite has also been reported. This paper analyses the returns to education for entrepreneurs in urban and rural regions in Finland and compares these to the returns for wage earners. These areas show different rates of self-employment, higher rates being found in rural areas and lower rates in urban areas. The analysis is based on a rich, register-based dataset that includes a 7% random sample of all Finns. To avoid potential sources of bias, Mincer-type income equations are estimated using different estimation procedures. The results show regional variation in returns to e…

Self-employment transitions and alternation in Finnish rural and urban labour markets

.  This paper deals with the transitions and alternation between self-employment, paid-employment and non-employment in Finland in 1987–1999, paying special attention to differences in self-employment dynamics between areas characterized by different labour market conditions, viz. rural and urban locations. Markovian analysis reveals significant differences by the type of area in the processes of transition between the three labour market states. Alternation between self-employment and other labour markets states turns out to be greater in rural than urban areas. Five major types of alternating working careers are identified. The type of area is importantly related to alternating working ca…

Kaupungistuminen kiihtyy : säilyykö alueellinen tasapaino?

Artikkelissa pohditaan alueellisen tasapainon käsitettä ja tarkastellaan tasapainon kehitystä Suomessa vuodesta 1995 lähtien. Kaupungistumisen kiihtymisen myötä alueellinen keskittyminen on edennyt nopeasti kasvun kohdistuessa vain metropolialueelle ja suuriin korkeakoulukaupunkeihin. Aluelähtöisesti katsoen alueellinen tasapaino on järkkynyt. Ihmislähtöisesti tarkastellen kaupungistuminen ei ole kuitenkaan johtanut suuriin alueiden välisiin tulotaso- tai hyvinvointieroihin, vaikka jähmeät sopeutumisprosessit, ennen kaikkea asuntomarkkinoilta seuraavat liikkuvuuden esteet todennäköisesti hidastavat alueelliseen tasapainoon pääsyä. peerReviewed

Kulttuuritoiminta ja alueellinen erilaistuminen : kulttuuritoiminnan rahoitus Suomen kunnissa 2010-luvulla

In Finland, cultural services have traditionally been developed as the services of the welfare state that are provided in every municipality. In the past few decades, new forms of governance, changing population structure and economic decline have affected municipalities’ operational environment. Simultaneously, the aims of cultural policy have increasingly broadened. This article examines how the municipal cultural services are financed in municipalities with different structural qualities and financial resources in Finland in the 2010s. peerReviewed

Kaupungistuminen ja alueiden väliset tuloerot Suomessa

Tämän analyysin keskeinen tutkimuskysymys on, missä aluekehityksessä mennään Suomessa. Analyysissa tarkastellaan suomalaisessa aluekehitystutkimuksessa saatuja tuloksia ja eritellään sekä aluekehityksen pitkää linjaa että sen viimeaikaista luonnetta kahden keskeisen määrittäjän, väestö- ja tulotietojen avulla. Kysymykset ovat: miten yhtäällä kaupungistuminen ja toisaalla alueellisten tuloerojen kehitys on edennyt? Empiirinen analyysi perustuu pääosin Tilastokeskuksen StatFin-tietokannasta poimittuihin, yhdistettyihin ja analysoituihin tietoihin. Alueellisen keskittymisen eli kaupungistumisen pitkää trendiä tarkastellaan väestötietojen avulla vuodesta 1880 alkaen. Toteutunutta alueellista ke…

Miksi naisia on vain vähän yrittäjinä?

Onko Suomi kaupungistunut kaupunkipolitiikan seurauksena?

Who turns to entrepreneurship later in life? - Push and pull in Finnish rural and urban areas

Age is an important factor in entrepreneurship. The paths into entrepreneurship at a later age may be varied. Self-employment in later life may be either a form of partial retirement or a career option. Older individuals may also be pushed into self-employment. The focus of this paper is on the career choices of older individuals and their background motivations in Finland. The purpose is to analyse the factors and motives in terms of the push and pull dichotomy that lead individuals to enter self-employment at older ages in different types of labour markets in Finland, viz., rural and urban areas. Although some studies have focused on transitions to self-employment among older workers, que…

Cumulative inertia or cumulative stress? Migration behaviour of Finnish graduates

An interesting yet largely unstudied question regarding labour migration behaviour and residence duration is whether migration becomes more or less likely over time. This paper analyses the determinants of residence duration for Finnish graduates. Our results affirm the importance of cumulative inertia as a determinant of migration. The longer a person stays in a region, the smaller are the hazard rates of migration. However, for those graduates who moved to a new region during their year of graduation, the propensity for repeat migration is particularly high during their first three years of residence. 

Air Transportation and Regional Growth: Which Way Does the Causality Run?

The role of airports has become increasingly important with globalization. To have a regional airport is an especially important asset for retaining companies in the region as well as attracting new economic activity to the region. A well-developed transport infrastructure can be seen as a facilitator that allows the economic potential of a region to be realized. The provision of transportation does not, however, automatically lead to economic growth. It may also be the other way round: economic development leads to the better transport infrastructure and accessibility, stressing demand side elements. This paper aims to shed further light on the relationship between regional airports and ec…

Työ, talous ja yliopisto : Jaakko Pehkonen 50 vuotta

Estimating regional differences in returns to education when schooling and location are determined endogenously

While the growing supply of university skills is known to have agglomerated towards the large centers in Finland, there is no research knowledge available on the development of regional demands. This paper attempts to fill this gap by analyzing regional variation in the private-sector return to university education in Finland for the period 1970 - 2004. In the analysis, we focus on studying 1) whether there are differences in the return to university between different region types, and 2) to what extent can these differences - if they exist - be explained by differences in regional skill supply and unemployment. For the econometric analysis, we use a large register-based dataset constructed…

Post-Migratory Employment Prospects: Evidence from Finland

This paper analyses the role which migration plays in improving post-migratory employment prospects of migrants (long-distance) within Finland, by examining the employment status of migrants and non-migrants at the end of the migration interval. The analysis is based on micro data from the period 1985–90. The results from multivariate analyses suggest that migration by itself has not augmented the likelihood of getting a job, even though tabular comparisons of re-employment rates between migrants and non-migrants suggest this to be the case. Migration, however, has an indirect role in enhancing job search outcomes as it moves workers to labour markets characterized by more favourable employ…

Book review "Interregional migration and public policy in Canada" by Kathleen M.Day and Stanley L. Winer

Unemployment and Migration: Does Moving Help?

Abstract The migration behaviour of the unemployed in Finland is analysed in terms of the causal effectof moving on individual employment status. In 1994, 17 percent of the labour force wasunemployed and the unemployment rate exhibited a very slow decline in 1994–1996. Overhalf of those who were unemployed at the end of 1994 were still unemployed two years later.The propensity to find a job is somewhat greater among migrants. However, the positive effectof moving diminishes once other personal characteristics are accounted for. Moreover, whencontrolling for endogenous migrant selectivity, an insignificant or even negative effect onemployment status emerges. This indicates that the relatively …

Cities, hinterlands and agglomeration shadows: spatial developments in Finland over 1880-2004

This paper analyzes long-term spatial developments in Finland by focusing on two predictions of the new economic geography (NEG) models, the increasing persistence of locational patterns and the emerging agglomeration shadow, i.e. the rising dominance of growth centers. Pre- and post-war periods are distinguished to roughly express the shift from an agriculture-based economy to a post-industrial country. The analyses base on the assumption that each of the 19 Finnish regions has a center of its own and the rest of the region forms its local hinterland. The empirical analysis is based on regional population data from 1880 to 2004 at decade intervals. First, to analyze the persistence of loca…

Opportunity- and Necessity-Driven Self-Employment Among Older People in Finland

To date, few empirical studies have attempted to highlight the impact of the socio-economic characteristics of older entrepreneurs according to whether they are driven by necessity or opportunity. Tervo and Haapanen contribute to the economics of ageing by showing that opportunity- and necessity-driven senior entrepreneurs differ in terms of socio-economic characteristics. This chapter utilizes a longitudinal data set from Finland. Individuals aged between 55 and 70 entering self-employment are grouped in terms of pull and push motivations. Profiles of entrepreneurs are developed using personal, family, and environmental characteristics. The results show that opportunity-driven older self-e…

Starting a new business later in life

Self-employment in later life may be either a career option or a form of partial retirement. This paper adds knowledge about those individuals who start a business when they are older. A large longitudinal data set is utilized to examine the transitions of individuals aged 55–74 to self-employment in Finland. The significance of prior activity as well as personal, household, financial, and environmental characteristics is analyzed for the transitions. The results show that most of those entering self-employment in later life have prior self-employment experience, thus suggesting that entrepreneurship at later ages is often habitual. Habitual entrepreneurs deviate from novice entrepreneurs i…

Spatial variation in the development of the return to university education in Finland, 1970-2004

While the growing supply of university skills is known to have agglomerated towards the large centers in Finland, there is no research knowledge available on the development of regional demands. This paper attempts to fill this gap by analyzing regional variation in the private-sector return to university education in Finland for the period 1970-2004. In the analysis, we focus on studying 1) whether there are differences in the return to university between different region types, and 2) to what extent can these differences - if they exist - be explained by differences in regional skill supply and unemployment. For the econometric analysis, we use a large register-based dataset constructed b…

Maassamuutto muovaa Suomea uudennäköiseksi : alhainen lähtömuutto avainasemassa alueen kasvussa

Pitkään jatkunut kaupungistuminen on kiihtynyt viime vuosina. Tällä hetkellä pärjäävät vain suuret kaupunkiseudut. Muuttoliike on tärkeässä roolissa tässä kehityksessä. Kaikilta alueilta muutetaan pois ja kaikille alueille muutetaan, mutta muuttovoittoa saavat vain harvat alueet. Alhainen lähtömuutto on avainasemassa. Helsingin seutu ja monipuoliset korkeakouluseudut kasvavat, koska niiltä muutetaan vain vähän pois. Väkimäärään suhteutettu tulomuutto jää Helsingin seudulla yllättävän pieneksi, mutta seutu kasvaa nopeimmin, koska sen lähtömuutto on vielä pienempää. Pitovoima ratkaisee. nonPeerReviewed

Migration Behaviour and Duration of Residence Spells of Graduating Students in Finland in 1987-2002

An interesting, but yet largely unstudied question concerns migration behaviour in different labour markets from the point of view of duration. How long are residenece spells? Why do some migrants move quite soon after the move, while others stay for a long time? How do personal and family characteristics account for differences in residence spells and repeat migration? Does earlier migration experience or other prior activity or experience explain for this? What is the role of labour market conditions and other region-specific factors? This paper deals with migration behaviour in Finland in 1987-2002. Migration will be analyzed in a duration-model context where movement is seen as terminat…