Marshallian vs Jacobs effects: which is stronger? Evidence for Russia unemployment dynamics

This paper studies the influence of diversification and specialization on one of the main indicators of the Russian labour market: unemployment growth. The purpose of the work is to find out which effects dominate in the Russian regions, Marshallian or Jacobs, and whether this predominance is stable for different time periods. We tested empirically the following hypotheses: 1) the dependence of the unemployment growth on the concentration or diversification is nonlinear due to possible overlapping effects of urbanization and localization; 2) the influence of the concentration or diversification on the unemployment growth depends on the time period. To test these hypotheses, we use nonparametric additive models with spatial effects. Both hypotheses found empirical confirmation, with each effect prevailing in different time periods: Marshallian effects were prevalent in 2008-2010, and 2013-2016, while Jacobs effects were prevalent in 2010-2013.