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Identifying productivity and amenity effects in interurban wage differentials

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  • Patricia E. Beeson
  • Randall W. Eberts

Abstract

This study focuses on the relative importance of amenity and productivity differences in determining wage differentials across urban areas. The approach developed takes advantage of the connection between land and labor market clearing conditions required for locational equilibrium of households and firms. Data on recent movers are used to estimate equilibrium wages and rents for a sample of metropolitan areas. This information is then used to identify amenity and productivity components of wages for each city in the sample. Using national estimates of the relative share of land in consumption and production, differences in productivity and amenities are found to be roughly equal sources of wage variation across the sample.

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File URL: http://www.clevelandfed.org/research/Workpaper/1987/wp8707.pdf
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Bibliographic Info

Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 8707.

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Date of creation: 1987
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Handle: RePEc:fip:fedcwp:8707

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Keywords: Wages ; Labor supply;

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