Variété, emploi et chômage aux Pays-Bas

In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using regional data for the period 1996-2002 for The Netherlands, we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Implications for regional policy follow. JEL classification: J60, R23, R58.