Regional development and the impact of the public sector in Denmark: employment growth and human capital

Abstract

This paper analyses the relationships between employment growth, human capital and regional development. To understand the spatial development of employment growth, we distinguish between the public and the private sector. The public sector has a major role in Denmark in the form of a large share of total employment and employment growth across space. We examine in particular the uneven geography of human capital and the relationships between the growth of human capital and total employment growth by Danish municipalities. It is moreover analysed, whether there is a concentration of human capital in the largest city-regions, and how such concentrations contribute to the uneven geography of employment growth. The paper concludes that both the public and private sectors are important regarding employment growth in Danish municipalities. Further, public and private human capital contributes to employment growth, and the public sector contributes, over time, to diminishing the uneven spatial distribution of human capital while the private sector increases the spatial inequality. Moreover, urbanisation has a significant effect on employment growth and human capital formation, both when it comes to the large city regions, and, in general, the distance to city centres.

Keywords:

• regional development
• human capital
• employment growth
• public sector
• urbanisation
• Denmark

Acknowledgements

This paper benefitted from helpful comments by Rikard Eriksson, Martin Rudbeck Jepsen and two anonymous reviewers.