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Urban agglomeration, wages and selection: Evidence from samples of siblings

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  • Krashinsky, Harry

Abstract

The large and significant relationship between city population and wages has been well-established in the agglomeration literature, and the influence of selection effects on this wage premium is important. This paper contributes new evidence to the understanding of this premium by using two different data sets of siblings in order to estimate the agglomeration premium while controlling for unobserved heterogeneity with a family-specific fixed effect. The inclusion of a familial fixed effect into the regression framework makes the city size wage premium insignificant, and there is a large return to a variable representing the correlation between familial ability and residence in an urban area in all of the data sets used in the analysis. The results are discussed in the context of the existing literature, and they demonstrate the importance of family background and selection effects for interpreting the agglomeration premium, which is small in the fixed effects regression.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 1 (January)
Pages: 79-92

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Handle: RePEc:eee:labeco:v:18:y:2011:i:1:p:79-92

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Wages Siblings Agglomeration Fixed effects;

References

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  1. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-42, April.
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  9. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2004. "Spatial Wage Disparities: Sorting Matters!," CEPR Discussion Papers 4240, C.E.P.R. Discussion Papers.
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Cited by:
  1. MORIKAWA Masayuki, 2011. "Urban Density, Human Capital, and Productivity: An empirical analysis using wage data," Discussion papers 11060, Research Institute of Economy, Trade and Industry (RIETI).

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