Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital
AbstractUsing 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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Bibliographic InfoPaper provided by Statistics Canada, Economic Analysis Division in its series The Canadian Economy in Transition with number 2010020e.
Date of creation: 25 Jan 2010
Date of revision:
Education; training and learning; Business performance and ownership; Labour; Educational attainment; Regional and urban profiles; Wages; salaries and other earnings;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-02-05 (All new papers)
- NEP-EDU-2010-02-05 (Education)
- NEP-GEO-2010-02-05 (Economic Geography)
- NEP-HRM-2010-02-05 (Human Capital & Human Resource Management)
- NEP-LAB-2010-02-05 (Labour Economics)
- NEP-URE-2010-02-05 (Urban & Real Estate Economics)
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