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Inter-regional Wage Dispersion in Portugal

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  • Vieira, J.A.C.

    ()

  • Couto, J.P.A.

    ()

  • Tiago, M.T.B.

    ()

Abstract

This paper examines the size o inter-regional wage dispersion in Portugal. For this purpose, we estimate a Mincer-type human capital wage equation, including controls for a large number of regions, and calculate a weighted and adjusted standard deviation (WASD) of inter-regional wage differentials. The value is high and quite stable over time. The highest wages are found in the region of Lisbon. Moreover, the results are quite sensitive to inclusion of human capital and industry controls. A decomposition analysis reveals that differences in average years of education and in the return to education across regions account for a significant fraction of observed wage differentials.

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Bibliographic Info

Article provided by Euro-American Association of Economic Development in its journal Regional and Sectoral Economic Studies.

Volume (Year): 6 (2006)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:eaa:eerese:v:6:y2006:i:6_6

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Related research

Keywords: regions; wages; human capital; Portugal;

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References

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  1. Coen N. Teulings & José A.C. Vieira, 1998. "Urban versus Rural Return to Human Capital in Portugal, A Cook-Book Recipe for Applying Assignment Models," Tinbergen Institute Discussion Papers 98-095/3, Tinbergen Institute, revised 20 Sep 2002.
  2. DuMond J.M. & Hisch, B.T. & Macpherson, D.A., 1996. "Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?," Working Papers 1996_08_01, Department of Economics, Florida State University.
  3. Edin, Per-Anders & Zetterberg, Johnny, 1992. "Interindustry Wage Differentials: Evidence from Sweden and a Comparison with the United States," American Economic Review, American Economic Association, vol. 82(5), pages 1341-49, December.
  4. Gilles Duranton & Vassilis Monastiriotis, 2000. "Mind the gaps: the evolution of regional inequalities in the UK, 1982-1997," LSE Research Online Documents on Economics 20135, London School of Economics and Political Science, LSE Library.
  5. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
  6. Inmaculada Garcia & Jose Alberto Molina, 2002. "Inter-regional wage differentials in Spain," Applied Economics Letters, Taylor & Francis Journals, vol. 9(4), pages 209-215.
  7. Oosterbeek, Hessel & van Praag, Mirjam, 1995. " Firm-Size Wage Differentials in the Netherlands," Small Business Economics, Springer, vol. 7(3), pages 173-82, June.
  8. Paulo Madruga & José Vieira, 2004. "Regions and Low-Wage Mobility in Portugal," ERSA conference papers ersa04p55, European Regional Science Association.
  9. Gilles Duranton & Vassilis Monastiriotis, 2002. "Mind the Gaps: The Evolution of Regional Earnings Inequalities in the U.K., 1982-1997," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 219-256.
  10. Idson, Todd L & Feaster, Daniel J, 1990. "A Selectivity Model of Employer-Size Wage Differentials," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 99-122, January.
  11. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
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Cited by:
  1. Jo�o Pereira & Aurora Galego, 2013. "Intra-Regional Regional Wage Inequality In Portugal: A Quantile Based Decomposition Analisys," ERSA conference papers ersa13p158, European Regional Science Association.
  2. repec:hal:wpaper:halshs-00586795 is not listed on IDEAS
  3. Budria, Santiago, 2007. "Economic Inequality in Portugal: A Picture in the Beginnings of the 21st century," MPRA Paper 1784, University Library of Munich, Germany.
  4. João Gabriel Fidalgo & Marta Simões & Adelaide Duarte, 2010. "Mind the Gap: Education Inequality at the Regional Level in Portugal, 1986-2005," Notas Económicas, Faculdade de Economia, Universidade de Coimbra, issue 32, pages 22-43, December.
  5. Adelaide Duarte & Marta Simões, 2009. "Channels of transmission of inequality to growth: A survey of the theory and evidence from a Portuguese perspective," GEMF Working Papers 2009-07, GEMF - Faculdade de Economia, Universidade de Coimbra.
  6. Aurora Galego & João Pereira, 2013. "Decomposition of Regional Wage Differences Along the Wage Distribution in Portugal: the Importance of Covariates," CEFAGE-UE Working Papers 2013_16, University of Evora, CEFAGE-UE (Portugal).
  7. Facundo Alvaredo, 2008. "Top incomes and earnings in Portugal 1936-2004," PSE Working Papers halshs-00586795, HAL.
  8. Vizer, David, 2011. "Behind the North-South divide: A decomposition analysis," MPRA Paper 28364, University Library of Munich, Germany.
  9. Aleksey Oshchepkov, 2007. "Are Interregional Wage Differentials in Russia Compensative?," Discussion Papers of DIW Berlin 750, DIW Berlin, German Institute for Economic Research.

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