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An Empirical Measure for Labor Market Density

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  • Pieter A. Gautier

    ()
    (Erasmus University Rotterdam)

  • Coen N. Teulings

    ()
    (SEO, University of Amsterdam)

Abstract

In this paper we derive a structural measure for labor market density based on the Ellison and Glasear (1997) "Index for industry concentration". This labor market density measure serves as a proxy for the number of workers that can reach a certain work area within a reasonal amount of traveling time. We apply this measure to a standard wage equation and find that it takes account of almost half of the cross region wage variance (not explained by other observables). Moreover, it explains substantially more than the traditional density measure: people per square mile.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-036/3.

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Date of creation: 27 Apr 2000
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Handle: RePEc:dgr:uvatin:20000036

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Web page: http://www.tinbergen.nl

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Keywords: labor market density; wage equation;

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