Who makes it up the London Escalator?
ambition, migration and advancement
in a big city labour market
Ian Gordon
Geography Department and Spatial Economics Research Centre
London School of Economics
LSE London Monday seminar,
17th January 2011
Escalators paved with gold?
‘Start spreading the news
...... these vagabond shoes
are longing to stray ..... right
through the very heart of it’
But Who Makes it Up ?
Maybe not the poor orphan of legend
‘Contrary
to popular belief, Dick Whittington was not
a poor, ill-treated orphan who managed against
all the odds to work his way up to Lord Mayor.
Coming from a wealthy family, Richard
Whittington had a successful business and civic
career before he became Lord Mayor. [and]
carved out a successful business career in a very
practical way as a mercer (dealer in costly fabrics
such as silk), wool merchant and royal financier’.
Corporation of London web site
But perhaps the most
professionally ambitious
‘I want to wake up in a city, that never sleeps .. and
find I’m a number one .. top of the list, king of the
hill …
‘If I can make it there, I’m gonna make it anywhere
…. It’s up to you ……’
New York, New York
‘when we started, the limits of our ambition was just
to be the best f ...ing band in London. We
disdained the provinces; it was a real London
mind-set. But once the world beckoned ……… ’
K. Richards, Life, 2010
Or the Foxiest ?
Outline
1.
2.
3.
4.
5.
Context and motivation
Sketch of theory
Methods
Results from LFS and BHPS analyses
Some conclusions
Context & Motivation
Context
• Part of SERC project on skills, migration and labour markets
–
with Champion/Coombes (working on Census LS data cf LFS / BHPS)
• Inspired by Fielding’s classic papers on South East England
(=extended London region) as ‘escalator region’ in 1970s/80s
• Seeking to update/extend to wider range of British city-regions
– Given even greater concentration of graduate jobs in London
• 50% above average
• 75% filled by migrants from RUK / overseas
• All net RUK migrants now graduates
• And shift focus from inter-class mobility to human capital
acquisition + selectivity of mobility / effects & people vs place
– via Glaeser et al on agglomeration / labour market effects
• Potential policy interests in relation to:
• LT equity / efficiency impacts of agglomerating advanced jobs in core
+ Question of how far life chances (for natives) really vary between core /
periphery - If migration can get you on the escalator
What Needs to be Explained
Stylised Facts from Fielding studies:
• Existing workers (as well as entrants from education) move
further/faster up occupational ladder if based in London/SE
• Effect is particularly strong for migrants to the region
• But significant proportion of the beneficiaries subsequently
move on
More generally:
• Why it is that young/qualified migrants are drawn to dynamic city
economies - if real incomes for given jobs/quals are no higher ?
= Aspect of a more general issue for neo-classical models of labour
migration
• if migration is equilibriating but costly, why does any individual
choose to make a move - rather than wait for others to do so ?
2. Sketch of Theory
•
•
•
•
•
Acquiring Competences
Locational Implications and Selectivity
Signalling
Life / career Cycles
Summary of Expectations
Acquiring competences
Two elements of human capital:
• Static: current competences of value for some activities
• Dynamic: capacity/disposition (‘ambition’) to use opportunities
on/around job (or study) to add, develop/extend competences
Variability of jobs in opportunities for competence dev.:
• Inherently – in relation to job requirements (specialisation,
programmability, novelty/proximity to cutting-edge)
• By design – employers’ choice to inhibit / encourage workers
efforts to develop competences of value inside/outside org.
Locational Implications & Selectivity
Workers with strong disposition / capacity to develop
HC on the job should choose:
– Jobs with more positive opportunities
– Locations with more such jobs
– Dense / dynamic flexible labour markets
• with maximum chances to secure financial rewards for acquired HC
• without need to incur high movement costs
– To organise lives to minimise costs of any necessary movement
→ particular attraction to agglomerations with:
• High order/non-routine functions
• Many employers + Flexible / high turnover labour markets
Employers needing such workers (learners / explorers)
should also be drawn there
Signalling
Information is problematic / asymmetric both for:
• Dynamic aspect of Human Capital
• Not certified – and may lapse
• Opportunities for development offered by jobs
Both workers and firms with real interest in development
may signal this by:
• locating in dense agglomerations with many similar employers,
despite:
•
•
Higher money wages
Not particularly high real wages (for competence levels)
Life / Career cycles
• People initially attracted to, and benefitting from
agglomerations for HC developmental reasons may
subsequently move on because:
• Interest, capacity and benefits from further on job/local
learning diminish with age / success / superior knowledge
• for individual and/or employers
• Incidental cultural characteristics of dynamic / developmental
agglomerations fall off /invert with age / success / stability
Summary of Expectations
Escalating = combined effect of:
a)
b)
c)
individuals’ dynamic HC / ambition
firms’ need for/tolerance of learners in partic job types
thick, competitive urban labour markets
•
•
spatial selectiveness of (a) and (b)
plus agglomeration effects on (c)
•
•
as consequence of positive feedback between these
maybe just one dominant escalator
•
•
internal (non-localised) labour markets – career tracks
inter-firm, private markets with stronger spatialised character
•
but partly as effect of self-selection
Geography of escalators = consequence of;
Very uneven outcomes individually and spatially
Occupational advancement = key motive for migration
– in 2 distinct forms:
Migrants should advance faster
METHODS
Scaling the Occupational Ladder
• Want a continuous measure of progress
– cf. Fielding focus on discrete inter-class shifts
• Job types involve unique combinations of human capital
– required for and / or generated by the work
• in competitive lm: pay rates reflect prices for each element
• and reflecting overall s & d: marginal prod + marginal cost
• Used 2-dimensional job classification:
– 4 digit occupations (371)
– 4 managerial / supervisory status categories
• JS scale value for each =
– average hourly earnings (LFS) - logged
• Combining direct and regression estimates, depending on n
– standardised for contextual influences
• year, region, firm size
A Measure of Ambition
•Conceived of as - a disposition to seek advancement by acquiring
employment-relevant human and social capital
•Distinct from (immediate) material objectives / needs – and
from social function of work
•Measure - based on two pairs of questions from 1991 /1999 BHPS
waves about two most important aspects of ‘work’ and a desirable
job:
•Scoring positively: promotion, career, initiative, job content
•Scoring negatively: to afford essentials, people’s company
•Ignoring: pay, security, hours, relations with manager
•U-shaped relation with (current) age •apparently lowered when first enter couplehood
•= part of reason for rather weak correlation across waves
• operational measure based on:
(a) standardising for age & and scaling to 0-1 range; then
(b) averaging 1991 and 1999 scores
•Related positively to qualifications + parental social class
•Also current region of residence, but not that of birthplace
• effect rather than cause ?
3 Modelling Issues
• Explaining levels or changes
– trade-off = sample sizes versus process interest
– both used here
• The significance of lagged dependent variables
– real effect of depreciation of human capital ? and/or
– spurious reflection of measurement errors + other transient ‘noise’
– some efforts at modelling – but results here based on trial values
• High proportion of JS ‘stayers’ – esp. in short run;
– under-stated where measurement / coding not consistent
– but exclude (at least for sig tests) because  non-normal  JS
17 year JS Change (BHPS)
Two Data Sources
Labour Force Survey:
– Regular, factual, very large sample
– Longitudinal element only 12 months, by
• 5 quarter panel structure – all vars but no movers and ?of
coding consistency
• Job / residence year ago ?s for all – memory but consistent
British Household Panel Study
– 18 waves 1991-2008 with core of repeated questions +
occasional extra attitudinal ones
– Much smaller sample subject to attrition
RESULTS
1. Levels of Occupational Attainment
Levels
LFS shows:
– For given age + qualifications: JS score
•
much higher for those working in Central London
• high also for rest of Greater South East
• only 2 of other 7 conurbations above UK average
– Significant contributor to core’s higher earnings / productivity
BHPS shows:
– Ambition as important as qualifications
– Family background matters
– Region of current residence (all of GSE) significant
• not that of birth
2. Occupational Progression over Time
Changes
LFS (1 year) shows:
– All under 50s with degrees progress a bit more
– But effect really concentrated among sub-set who:
• migrated inter-regionally; and
• work in Central London
BHPS (15 years) shows:
– Apart from those gaining new qualifs (degrees)
– Escalator benefit concentrated on:
• Ambitious people spending time as GSE residents
Conclusions
Conclusions
• Seems clear evidence of escalator effects for:
– Central London workers and/or GSE residents
– Maybe largely for migrants
– But may just reflect selection effect for ‘ambition’
• The combination of Ambition + time in core region
seems to be crucial to ‘moving on up’
– Not either on their own
• At least consistent with sketched ‘theory’