Advanced Search
MyIDEAS: Login to save this article or follow this journal

Wages and the City. Evidence from Italy

Contents:

Author Info

  • Di Addario, Sabrina
  • Patacchini, Eleonora

Abstract

We analyze empirically the impact of urban agglomeration on Italian wages. Using micro-data from the Bank of Italy's Survey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employees distributed in 242 randomly drawn local labor markets, we test whether the structure of wages varies with urban scale. We find that every additional 100,000 inhabitants in the local labor market raises earnings by 0.1 percent. The use of a geographical approach enables us to state that this effect decays very rapidly with distance, losing significance beyond approximately 12Â kilometers. We also find that urbanization does not affect returns to experience and that it reduces returns to education and to tenure with current firm, while providing a premium to worker supervisors.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6VFD-4PNM471-2/2/79f409287ac30330128313219b2d94c4
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 5 (October)
Pages: 1040-1061

as in new window
Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:1040-1061

Contact details of provider:
Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Wages Urbanization Agglomeration externalities Population clustering Worker mobility;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor pooling, labor poaching and spatial clustering," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20103, London School of Economics and Political Science, LSE Library.
  2. Wheeler, Christopher H, 2001. "Search, Sorting, and Urban Agglomeration," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 19(4), pages 879-99, October.
  3. Dell'Aringa, Carlo & Lucifora, Claudio & Origo, Federica, 2005. "Public Sector Pay and Regional Competitiveness: A First Look at Regional Public-Private Wage Differentials in Italy," IZA Discussion Papers 1828, Institute for the Study of Labor (IZA).
  4. Yankow, Jeffrey J., 2006. "Why do cities pay more? An empirical examination of some competing theories of the urban wage premium," Journal of Urban Economics, Elsevier, vol. 60(2), pages 139-161, September.
  5. Jones, C.I., 2000. "Sources of U.S. Economic Growth in a World of Ideas," Papers, United Nations World Employment Programme- 99-29, United Nations World Employment Programme-.
  6. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  7. David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
  8. Sabrina Di Addario, 2005. "Job Search in Thick Markets: Evidence from Italy," Economics Series Working Papers 235, University of Oxford, Department of Economics.
  9. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, Elsevier, vol. 22(9), pages 1325-1343, September.
  10. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2004. "University Decentralization as Regional Policy: The Swedish Experiment," Berkeley Program on Housing and Urban Policy, Working Paper Series, Berkeley Program on Housing and Urban Policy qt81n6b8fb, Berkeley Program on Housing and Urban Policy.
  11. Fu, Shihe, 2007. "Smart Cafe Cities: Testing human capital externalities in the Boston metropolitan area," Journal of Urban Economics, Elsevier, vol. 61(1), pages 86-111, January.
  12. Sabrina Di Addario & Eleonora Patacchini, 2006. "Is there an urban wage premium in Italy?," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 570, Bank of Italy, Economic Research and International Relations Area.
  13. Gyourko, Joseph & Kahn, Matthew & Tracy, Joseph, 1999. "Quality of life and environmental comparisons," Handbook of Regional and Urban Economics, Elsevier, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 37, pages 1413-1454 Elsevier.
  14. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
  15. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
  16. Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," NBER Working Papers 10191, National Bureau of Economic Research, Inc.
  17. Patricia Rice & Anthony J. Venables, 2004. "Spatial Determinants of Productivity: Analysis for the Regions of Great Britain," CEP Discussion Papers dp0642, Centre for Economic Performance, LSE.
  18. Robert H. Topel, 1990. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," NBER Working Papers 3294, National Bureau of Economic Research, Inc.
  19. Patacchini, Eleonora & Zenou, Yves, 2007. "Intergenerational Education Transmission: Neighborhood Quality and/or Parents’ Involvement?," IZA Discussion Papers 2608, Institute for the Study of Labor (IZA).
  20. Guido de Blasio & Sabrina Di Addario, 2005. "Do Workers Benefit from Industrial Agglomeration?," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 45(4), pages 797-827.
  21. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, American Economic Association, vol. 86(1), pages 54-70, March.
  22. Shihe Fu & Stephen L. Ross, 2007. "Wage Premia in Employment Clusters: Does Worker Sorting Bias Estimates?," Working papers, University of Connecticut, Department of Economics 2007-26, University of Connecticut, Department of Economics, revised Dec 2009.
  23. Moretti, Enrico, 2004. "Human capital externalities in cities," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 51, pages 2243-2291 Elsevier.
  24. Edward Glaeser, 1997. "Learning in Cities," NBER Working Papers 6271, National Bureau of Economic Research, Inc.
  25. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  26. Rosenthal, Stuart S. & Strange, William C., 2008. "The attenuation of human capital spillovers," Journal of Urban Economics, Elsevier, vol. 64(2), pages 373-389, September.
  27. Benabou, Roland, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(3), pages 619-52, August.
  28. Kim, Sunwoong, 1990. "Labor heterogeneity, wage bargaining, and agglomeration economies," Journal of Urban Economics, Elsevier, vol. 28(2), pages 160-177, September.
  29. Sascha O. Becker & Andrea Ichino & Giovanni Peri, 2003. "How Large is the "Brain Drain" from Italy?," CESifo Working Paper Series 839, CESifo Group Munich.
  30. Ciccone, Antonio & Peri, Giovanni, 2000. "Human Capital and Externalities in Cities," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2599, C.E.P.R. Discussion Papers.
  31. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October.
  32. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  33. Giles Duranton & Diego Puga, 2003. "Micro-Foundations of Urban Agglomeration Economies," NBER Working Papers 9931, National Bureau of Economic Research, Inc.
  34. Tabuchi, Takatoshi & Yoshida, Atsushi, 2000. "Separating Urban Agglomeration Economies in Consumption and Production," Journal of Urban Economics, Elsevier, vol. 48(1), pages 70-84, July.
  35. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  36. Dwight W. Adamson & David E. Clark & Mark D. Partridge, 2004. "Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 44(2), pages 201-224.
  37. Brunello, Giorgio, 2001. "On the Complementarity between Education and Training in Europe," IZA Discussion Papers 309, Institute for the Study of Labor (IZA).
  38. Moomaw, Ronald L., 1983. "Is population scale a worthless surrogate for business agglomeration economies?," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 13(4), pages 525-545, November.
  39. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
  40. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, October.
  41. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  42. Diamond, Charles A & Simon, Curtis J, 1990. "Industrial Specialization and the Returns to Labor," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 8(2), pages 175-201, April.
  43. Christopher H. Wheeler, 2005. "Cities and the growth of wages among young workers: evidence from the NLSY," Working Papers, Federal Reserve Bank of St. Louis 2005-055, Federal Reserve Bank of St. Louis.
  44. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 66, pages 281.
  45. Margaret Stevens, 2003. "Earnings Functions, Specific Human Capital, and Job Matching: Tenure Bias Is Negative," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 21(4), pages 783-806, October.
  46. Luigi Cannari & Francesco Nucci & Paolo Sestito, 2000. "Geographic labour mobility and the cost of housing: evidence from Italy," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 32(14), pages 1899-1906.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:1040-1061. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.