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Regional wage differences in the Netherlands: Micro-evidence on agglomeration externalities

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  • Stefan Groot

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  • Henri de Groot

    ()

  • Martijn Smit

Abstract

Based on micro-data on individual workers for the period 2000–2005, we show that regional wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics of workers. Remaining effects are partially explained by variations in employment density, with an elasticity of about 3.8 percent and by Marshall-Arrow-Romer externalities, where doubling the share of a (2-digit NACE) industry results in a 2.4 percent higher productivity. We find evidence for a negative effect of competition (associated with Porter externalities) and diversity (associated with Jacobs externalities).

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Bibliographic Info

Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 184.

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Date of creation: Jul 2011
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Handle: RePEc:cpb:discus:184

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  1. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 2000. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," NBER Working Papers 7457, National Bureau of Economic Research, Inc.
  2. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  3. H.L.F. de Groot & R. Nahuis & P.J.G. Tang, 2004. "Is the American Model Miss World? Choosing between the Anglo-Saxon Model and a European-Style Alternative," Working Papers, Utrecht School of Economics 04-26, Utrecht School of Economics.
  4. Fishlow, Albert, 1972. "Brazilian Size Distribution of Income," American Economic Review, American Economic Association, vol. 62(2), pages 391-402, May.
  5. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc.
  6. Henri L.F. de Groot & Jacques Poot & Martijn J. Smit, 2007. "Agglomeration, Innovation and Regional Development: Theoretical Perspectives and Meta-Analysis," Tinbergen Institute Discussion Papers 07-079/3, Tinbergen Institute.
  7. Joeri Gorter & Suzanne Kok, 2009. "Agglomeration economies in the Netherlands," CPB Discussion Paper 124, CPB Netherlands Bureau for Economic Policy Analysis.
  8. Nijkamp, P. & Abreu, M., 2009. "Regional development theory," Serie Research Memoranda, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics 0029, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  9. Dinand Webbink, 2004. "Returns to university education; evidence from an institutional reform," CPB Discussion Paper 34, CPB Netherlands Bureau for Economic Policy Analysis.
  10. Briant, A. & Combes, P.-P. & Lafourcade, M., 2010. "Dots to boxes: Do the size and shape of spatial units jeopardize economic geography estimations?," Journal of Urban Economics, Elsevier, vol. 67(3), pages 287-302, May.
  11. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
  12. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
  13. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(476), pages 93-106, January.
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Cited by:
  1. Willemijn Van Der Straaten & Jan Rouwendal, 2011. "Why are the commuting distances of power couples so short? An analysis of the location preferences of households," ERSA conference papers ersa10p816, European Regional Science Association.
  2. Stefan Groot & Henri de Groot, 2011. "Wage inequality in the Netherlands: Evidence, trends and explanations," CPB Discussion Paper 186, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Anderstig, Christer & Berglund, Svante & Eliasson, Jonas & Andersson, Matts & Pyddoke, Roger, 2012. "Congestion charges and labour market imperfections: “Wider economic benefits” or “losses”?," Working papers in Transport Economics 2012:4, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  4. Stefan P.T. Groot & Henri L.F. de Groot & Paolo Veneri, 2012. "The Educational Bias in Commuting Patterns: Micro-Evidence for the Netherlands," Tinbergen Institute Discussion Papers 12-080/3, Tinbergen Institute.

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