What Drives the Urban Wage Premium? Evidence along the Wage Distribution
AbstractThis paper aims at disentangling the role played by different theoretical explanations in accounting for the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from low-to-high-density areas in Italy, using quantile regression and individual panel data to control for the sorting of workers. The results show that skilled workers enjoy a higher wage premium when they migrate (wage level effect), in line with the agglomeration externalities explanation, while unskilled workers benefit more from a wage premium accruing over time (wage growth effect). Further, investigating the determinants of the wage growth effect in greater depth, we find that for unskilled workers the wage growth is mainly due to human capital accumulation over time, consistently with the “learning” hypothesis, while for skilled workers it is the “coordination” hypothesis that matters..
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Bibliographic InfoPaper provided by University of Barcelona, Regional Quantitative Analysis Group in its series AQR Working Papers with number 201202.
Length: 34 pages
Date of creation: Jan 2012
Date of revision: Feb 2012
Urban Wage Premium; Human Capital; Spatial Sorting; Wage Distribution; Quantile Fixed Effects. JEL classification: J31; J61; R23;
Other versions of this item:
- Alessia Matano & Paolo Naticchioni, 2012. "What Drives the Urban Wage Premium? Evidence along the Wage Distribution," Working Papers - Dipartimento di Economia 13-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2012.
- Alessia Matano & Paolo Naticchioni, 2012. "What Drives the Urban Wage Premium? Evidence along the Wage Distribution," IREA Working Papers 201203, University of Barcelona, Research Institute of Applied Economics, revised Feb 2012.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-20 (All new papers)
- NEP-LAB-2013-04-20 (Labour Economics)
- NEP-LMA-2013-04-20 (Labor Markets - Supply, Demand, & Wages)
- NEP-MIG-2013-04-20 (Economics of Human Migration)
- NEP-URE-2013-04-20 (Urban & Real Estate Economics)
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.:
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