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Human Capital Externalities and the Urban Wage Premium: Two Literatures and their Interrelations

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  • Halfdanarson, Benedikt

    (Statistics Iceland)

  • Heuermann, Daniel F.

    (University of Regensburg)

  • Suedekum, Jens

    (Heinrich Heine University Düsseldorf)

Abstract

In this paper we survey the recent developments in two empirical literatures at the crossroads of labor and urban economics: Studies about localized human capital externalities (HCE) and about the urban wage premium (UWP). After surveying the methods and main results of each of these two literatures separately, we highlight several interrelations between them. In particular we ask if HCE can be interpreted as one fundamental cause of the UWP, and we discuss if one literature can conceptually learn from the methods that are used by the other one.

Suggested Citation

  • Halfdanarson, Benedikt & Heuermann, Daniel F. & Suedekum, Jens, 2008. "Human Capital Externalities and the Urban Wage Premium: Two Literatures and their Interrelations," IZA Discussion Papers 3493, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp3493
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    More about this item

    Keywords

    human capital externalities; local labor markets; urban wage premium; agglomeration;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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