While the importance of human capital for regional economic performance is well established, existing research has focused primarily on average skill levels, overlooking substantial variation in the skills of workers within places. This paper considers how the distribution of skills within a region affects productivity, introducing skill dispersion (the spread of individual skill levels within regional labour markets) as a distinct dimension of regional capability.

Using administrative microdata, we estimate individual skill levels using an AKM wage model and aggregate these measures to examine skill dispersion across regional labour markets. We find that, conditional on average skill, greater skill dispersion is generally associated with lower regional productivity. However, this relationship varies substantially with the overall skill level of a region: the negative effect of dispersion diminishes as average skill rises and becomes positive in the highest-skill regions.

These findings suggest that the economic consequences of skill heterogeneity depend on the wider capability of a regional workforce. While highly skilled regions may be better able to integrate diverse capabilities productively, low- and mid-skill regions may face greater costs from heterogeneous skill distributions.

The paper highlights skill dispersion as an important and previously underexplored dimension of regional development, with implications for place-sensitive skills policy.

David’s research sits at the intersection of labour economics and regional economics, focusing on how skills shape regional economic outcomes. His research challenges reliance on reductive proxies such as qualifications, instead advancing a place-based, context-sensitive understanding of skills.

He has published work examining both the causes and consequences of skills gaps at the regional level. This includes research on how regional skill gaps affect firm productivity and how regional agglomeration can improve the matching of workers and firms, thereby reducing skill mismatch. His more recent work explores how areas diversify into green industries and the role of specific skills in this process.