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Regional structure of wages and external economies in Spain

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  • Esteban Sanroma Melendez
  • Raul Ramos Lobo

    (Universitat de Barcelona)

Abstract

Regional data on wages for the Spanish economy show that workers who live in developed regions earn more than workers in other regions. Literature on external economies provides a possible explanation of why firms do not move from these regions to others where wages are lower. Previous studies for the Spanish case use aggregated sectoral data to explain in terms of external economies why average wages are different across regions. The original contribution of this paper consists of using individual data to detect the existence and nature of external economies as an explanatory cause of territorial wage differences. With this aim, we have used individual data from the EPF 1990-91 (INE). This information permits us to control the influence of individual and job characteristics on wages to, first, detect the existence of external economies and, second, to test alternative explanations of their presence. The empirical evidence obtained confirms the relevance of territorial external economies and their influence on wages, as a result of improvements in the productive efficiency of the firm. In concrete terms, the more relevant external economies are associated with the regional human capital stock and geographical productive specialisation.

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Bibliographic Info

Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 51.

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Length: 53 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:bar:bedcje:199951

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es
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Cited by:
  1. Raul Ramos & Esteban Sanromá, 2001. "Local human capital and productivity: an analysis for the Spanish regions," ERSA conference papers ersa01p139, European Regional Science Association.
  2. Esteban Sanroma Melendez & Raul Ramos Lobo, 2001. "Capital humano local y productividad en las provincias espanolas," Working Papers in Economics, Universitat de Barcelona. Espai de Recerca en Economia 71, Universitat de Barcelona. Espai de Recerca en Economia.
  3. Ramos, Raul & Sanroma, Esteban, 1999. "Local human capital and external economies: evidence for Spain," ERSA conference papers ersa99pa309, European Regional Science Association.

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