Regional Wage Differences in the Netherlands: Micro-Evidence on Agglomeration Externalities
AbstractBased on micro-data on individual workers for the period 2000-2005, we show that 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 InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 11-050/3.
Date of creation: 07 Mar 2011
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regional labour markets; wage differentials; agglomeration externalities;
Other versions of this item:
- Stefan Groot & Henri de Groot & Martijn Smit, 2011. "Regional wage differences in the Netherlands: Micro-evidence on agglomeration externalities," CPB Discussion Paper 184, CPB Netherlands Bureau for Economic Policy Analysis.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-26 (All new papers)
- NEP-EUR-2011-03-26 (Microeconomic European Issues)
- NEP-GEO-2011-03-26 (Economic Geography)
- NEP-LAB-2011-03-26 (Labour Economics)
- NEP-URE-2011-03-26 (Urban & Real Estate Economics)
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