Urban Density, Human Capital, and Productivity: An empirical analysis using individual wage data (Japanese)
AbstractA large number of studies have indicated that densely populated cities enhance the productivity of workers through knowledge spillover and a better matching with employers in the labor market. This paper quantitatively analyzes the relationship among urban density, human capital, and wages by using micro-data from the Basic Survey on Wage Structure for the years from 1990 to 2009. According to the estimation of standard wage functions augmented with population density, a relatively higher agglomeration wage premium is observed for several service sectors, including the wholesale and retail industries. The agglomeration premium is larger for workers with higher observable skills such as education, tenure, and potential experience, which suggests rapid learning and a better matching in the densely populated cities. Under structural changes such as a declining population and trend toward a knowledge-based service economy, forming densely populated areas by facilitating the migration of workers has desirable effects on both individual wages and firm productivity throughout Japan.
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Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion Papers (Japanese) with number 11046.
Length: 42 pages
Date of creation: Apr 2011
Date of revision:
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Postal: 11th floor, Annex, Ministry of Economy, Trade and Industry (METI) 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-04 (All new papers)
- NEP-GEO-2011-06-04 (Economic Geography)
- NEP-URE-2011-06-04 (Urban & Real Estate Economics)
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