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How Does Employment Density Influence Individuals' Wages? A Micro Data Approach

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  • Håkansson, Johan

    (HUI Research)

  • Isacsson, Gunnar

    (The Swedish National Road and Transport Research Institute (VTI))

Abstract

We estimate the effect of employment density on wages in Sweden in a large geocoded data set on individuals and workplaces. Employment density is measured in four circular zones around each individual's place of living. The data contains a rich set of control variables that we use in an instrumental variables framework. Results show a relatively strong but rather local positive effect of employment density on wages. Beyond 5 kilometers the effect becomes negative. This might indicate that the effect of agglomeration economies falls faster with distance than the effects of congestion.

Suggested Citation

  • Håkansson, Johan & Isacsson, Gunnar, 2013. "How Does Employment Density Influence Individuals' Wages? A Micro Data Approach," HUI Working Papers 97, HUI Research.
    • Handle: RePEc:hhs:huiwps:0097
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    agglomeration economies; accessibility; IV; Sweden;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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