Wage Premia in Employment Clusters: Agglomeration or Worker Heterogeneity?
AbstractThis paper tests whether the correlation between wages and the spatial concentration of employment can be explained by unobserved worker productivity differences. Residential location is used as a proxy for a worker’s unobserved productivity, and average workplace commute time is used to test whether location based productivity differences are compensated away by longer commutes. Analyses using confidential data from the 2000 Decennial Census Long Form find that the agglomeration estimates are robust to comparisons within residential location and that the estimates do not persist after controlling for commutes suggesting that the productivity differences across locations are due to agglomeration, rather than productivity differences across individuals.
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Bibliographic InfoPaper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 10-04.
Length: 56 pages
Date of creation: Feb 2010
Date of revision:
Agglomeration; Wages; Sorting; Locational Equilibrium; Human Capital Externalities;
Find related papers by JEL classification:
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
- NEP-GEO-2010-03-28 (Economic Geography)
- NEP-LAB-2010-03-28 (Labour Economics)
- NEP-URE-2010-03-28 (Urban & Real Estate Economics)
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