Can NEG explains the spatial distribution of wages in developing countries? Evidence from Chile
AbstractThe New Economic Geography (NEG) has been tested to explain the spatial concentration of wages in developed countries, but it has not been evaluated for developingcountries where the excessive spatial concentration seems to be related with negative consequences on the economic development. This paper covers this gap in the literature estimating by first time a NEG model for Chile and pursuing two research questions : 1) Can the NEG explain the spatial distribution of wages in a developing country as Chile?, and 2) How can the NEG be used to infer information about the future level of spatial concentration of wages in Chile? The results suggest that the case of Chile is poorly explained by the NEG and higher level of spatial concentration should be expected in the future. These results indicate that the empirical analysis ofNEG is not a direct extension toward developing countries, and some considerations such as inclusion of the rst nature or analysis at micro data level must be incorporated by future researches.
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Bibliographic InfoPaper provided by Universidad Catolica del Norte, Chile, Department of Economics in its series Documentos de Trabajo en Economia y Ciencia Regional with number 02.
Length: 28 pages
Date of creation: Sep 2010
Date of revision: Sep 2010
New Economic Geography; Spatial Distribution of Wages; Market-access effect; Housing-price effect;
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