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Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital

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Author Info

  • Brown, W. Mark
  • Newbold, Bruce
  • Beckstead, Desmond
  • Guo, Yusu

Abstract

Using 2001 Census data, this paper investigates the extent to which the urban-rural gap in the earnings of employed workers is associated with human capital composition and agglomeration economies. Both factors have been theoretically and empirically linked to urban-rural earnings differences. Agglomeration economies-the productivity enhancing effects of the geographic concentration of workers and firms-may underlie these differences as they may be stronger in larger urban centres. But human capital composition may also drive the urban-rural earnings gap if workers with higher levels of education and/or experience are more prevalent in cities. The analysis finds that up to one-half of urban-rural earnings differences are related to human capital composition. It also demonstrates that agglomeration economies related to city size are associated with earnings levels, but their influence is significantly reduced by the inclusion of controls for human capital.

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File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11-622-M2010020&ObjType=46&lang=en&limit=0
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Bibliographic Info

Paper provided by Statistics Canada, Economic Analysis in its series The Canadian Economy in Transition with number 2010020e.

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Date of creation: 25 Jan 2010
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Handle: RePEc:stc:stcp1e:2010020e

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Related research

Keywords: Business performance and ownership; Education; training and learning; Educational attainment; Labour; Regional and urban profiles; Wages; salaries and other earnings;

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Cited by:
  1. Ben Dachis, 2013. "Cars, Congestion and Costs: A New Approach to Evaluating Government Infrastructure Investment," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 385, July.

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