Employment in the tertiary sector. A spatial estimation for municipalities in Mexico’s central region, 1999-2009

Abstract

The aim is to identify an agglomeration pattern in the services sector’s spatial division of employment among municipalities in Mexico’s central region. By using the method of spatial econometrics, a spatial error model was estimated for the tertiary sector. According to results, the income elasticity of employment is low, the weight of economic unities is significant and there is little sensitivity to an increase in wages. Although the exploratory analysis, based on Moran’s I, suggests effects of spatial autocorrelation of employment in the region studied, this cannot be confirmed with enough certainty from the results of the estimation of a spatial error model. Despite this estimation technique is not new, in Mexico there are few studies dealing with employment in the tertiary sector. The spatial autoregressive parameter of the error term provides evidence that there is a local rather than global spatial association of employment. It therefore follows that in the tertiary sector spatial vicinity among the most dynamic municipalities has generated more growth and agglomeration than in the rest of them.