Policy Research Domains (Major Policy Research Domains) I. Maintaining Economic Dynamism under the Adverse Demographic Conditions of Low Fertility and Aging Population
Risk-sharing and Matching in Industrial Agglomeration
Given the serious unemployment problems in many countries around the world, it is very important to understand the mechanisms of "risk-sharing" and "matching" that are at work in the labor market, both from the academic and practical standpoints. Based on such observations, this research project analyzes the relationships between industrial agglomeration and risk-sharing/matching in the labor market, using micro-data that provide detailed information on present-day Japan. First, based on the work of Overman and Puga (2009), we examine the relationship between the magnitude of idiosyncratic risk faced by individual plants in a particular industry and the degree of industrial agglomeration. Then, we test the risk-sharing function of industrial agglomeration.
