Regional structure of wages and external economies in Spain
AbstractRegional 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 InfoPaper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 51.
Length: 53 pages
Date of creation: 1999
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Other versions of this item:
- Raul Ramos & Esteban Sanroma, 1998. "Regional structure of wages and external economies in Spain," ERSA conference papers ersa98p160, European Regional Science Association.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- D62 - Microeconomics - - Welfare Economics - - - Externalities
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