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Regional Wage Differences in the Netherlands: Micro-Evidence on Agglomeration Externalities

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  • Stefan P.T. Groot

    (VU University Amsterdam)

  • Henri L.F. de Groot

    (VU University Amsterdam)

  • Martijn Smit

    (VU University Amsterdam)

Abstract

Based 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 Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 11-050/3.

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Date of creation: 07 Mar 2011
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Handle: RePEc:dgr:uvatin:20110050

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Keywords: regional labour markets; wage differentials; agglomeration externalities;

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References

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  9. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(6), pages 1126-52, December.
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  11. 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, Tinbergen Institute 07-079/3, Tinbergen Institute.
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Cited by:
  1. 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, Tinbergen Institute 12-080/3, Tinbergen Institute.
  2. 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.
  3. 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.
  4. 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, CTS - Centre for Transport Studies Stockholm (KTH and VTI) 2012:4, CTS - Centre for Transport Studies Stockholm (KTH and VTI).

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