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The Importance of Regional Factors in the Determination of Earnings: The Case of Austria

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  • Gunther Maier

    (Institute for Urban and Regional Studies, Economics University of Vienna, Vienna, Austria)

  • Peter Weiss

    (Department of Economics, Economics University of Vienna, Vienna, Austria)

Abstract

This paper investigates interregional differences in earnings functions in Austria, in particular, the neoclassical hypothesis that regional earnings differentials can be eliminated by correcting for productivity-related characteristics. The results lead to a rejection of this hypothesis and show that earnings differentials are brought about by structural differences in the earnings functions rather than simple scale effects. The interregional earnings differences are mainly due to a different lifetime pattern of earnings and a different relationship between occupational status and earnings. As compared to other explanatory variables, the region contributes least to the explanation of earnings, although the effect is highly significant.

Suggested Citation

  • Gunther Maier & Peter Weiss, 1986. "The Importance of Regional Factors in the Determination of Earnings: The Case of Austria," International Regional Science Review, , vol. 10(3), pages 211-220, December.
    • Handle: RePEc:sae:inrsre:v:10:y:1986:i:3:p:211-220
    DOI: 10.1177/016001768601000302
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    References listed on IDEAS

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    Cited by:

    1. Ingrid Kubin & Michael Steiner, 1991. "Labor Market Performance and Regional Types: A Conceptual Framework with Empirical Analysis of Austria," International Regional Science Review, , vol. 14(3), pages 275-298, December.
    2. P.J. Hemmings, 1989. "Regional Earnings Differences in Great Britain: Evidence From the New Earnings Survey," Economics Discussion / Working Papers 89-26, The University of Western Australia, Department of Economics.
    3. Michael Beenstock & Daniel Felsenstein, 2008. "Regional Heterogeneity, Conditional Convergence and Regional Inequality," Regional Studies, Taylor & Francis Journals, vol. 42(4), pages 475-488.
    4. Michael Beenstock & Daniel Felsenstein, 2010. "Marshallian theory of regional agglomeration," Papers in Regional Science, Wiley Blackwell, vol. 89(1), pages 155-172, March.
    5. A. Menezes, Tatiane & R. Azzoni, Carlos, 2005. "Evolução da Desigualdade de Salários entre Regiões Metropolitanas Brasileiras: Custo de Vida e Aspectos de Demanda e Oferta de Trabalho," TD NEREUS 5-2005, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    6. Michael Beenstock & Daniel Felsenstein, 2005. "Regional Heterogenity and Conditional Convergence," ERSA conference papers ersa05p307, European Regional Science Association.
    7. Vera A. Adamchik & Thomas J. Hyclak, 2013. "The Evolution Of Regional Wage Differentials In A Transition Economy: Evidence From Poland," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 7(5), pages 1-13.

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