ANET members László Czaller and Zoltán Elekes received funding from the Hungarian Scientific Research Fund for their new projects.

László Czaller will lead a project on "Skills, matching and competition in thick labour markets: Understanding the mechanisms behind urban skill premia" (OTKA FK_22 142941)

Over the last few decades the importance of cognitive and social skills to individual earnings and other labor market outcomes has been firmly established by a large number of studies spanning various countries. Recent studies have also shown that cognitive and social skills are better rewarded in large labour markets, however, it is still unclear what mechanisms are responsible for the higher returns to these skills in cities. Some scholars link these findings to the micro-founded mechanisms of agglomeration, while others argue that cognitive and social skills are valued more in thick urban labour markets because the occupational structure of large cities is skewed towards cognitive work activities which implies relatively higher demand for these skills. Our research aims to provide a deeper understanding of why cognitive and social skills are rewarded more in thick labor markets. Specifically, we examine in detail the relative importance of two mechanisms through which the size of the local labour market might contribute to the extent to which skills affect individual earnings: assortative matching that reduces mismatch between the skill set of employees and the actual requirements of employers in thick urban labor markets and market competition among local producers that drives up the demand for certain skills.

Zoltán Elekes will lead a project on the "Structure and robustness of regional supplier networks" (OTKA FK_22 143064)

The general aim of this project is to provide systematic evidence on the spatial structure of supplier networks conditioning the ability of regions to resist economic shocks and to develop new growth paths. Substantial attention in academia and policy has been directed recently towards the notion of regional resilience, hence putting emphasis on regions being able to adapt their industrial, technological and institutional structures in an economic system that is constantly evolving. Still, although regions are collections of networked individuals, firms, industries and institutions, empirical evidence on how network structures condition regional resilience are scarce. We address this gap by drawing insights from the network robustness literature that are novel to regional science, and by deploying a unique dataset on firm supplier networks in Hungary for 2016-23.

Specifically, we will derive the spatial layout of supplier networks between firms and between industries on a yearly bases. Equipped with these networks we will first explore the spatial topology of the inter-industry supplier network for 2016-19, and its connection to productivity and specialisation in regions. Second, we will measure the robustness of the intra- and inter-regional firm supplier networks, and show how this conditions the resilience of regions in terms of economic performance during crisis. Third, we will measure the contribution of typical diversification patterns in regions to the robustness of their supplier networks. As an intended by-product, the project aims to provide information on the local capability base and diversification options of Hungarian regions.