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An Empirical Measure for Labor Market Density

Author

Listed:
  • Pieter A. Gautier

    (Erasmus University Rotterdam)

  • Coen N. Teulings

    (SEO, University of Amsterdam)

Abstract

In this paper we derive a structural measure for labor market density based on the Ellison and Glasear (1997) "Index for industry concentration". This labor market density measure serves as a proxy for the number of workers that can reach a certain work area within a reasonal amount of traveling time. We apply this measure to a standard wage equation and find that it takes account of almost half of the cross region wage variance (not explained by other observables). Moreover, it explains substantially more than the traditional density measure: people per square mile.

Suggested Citation

  • Pieter A. Gautier & Coen N. Teulings, 2000. "An Empirical Measure for Labor Market Density," Tinbergen Institute Discussion Papers 00-036/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20000036
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    Cited by:

    1. Andersson, Fredrik & Burgess, Simon & Lane, Julia I., 2007. "Cities, matching and the productivity gains of agglomeration," Journal of Urban Economics, Elsevier, vol. 61(1), pages 112-128, January.
    2. Gautier, P.A. & Teulings, C.N., 2009. "Search and the city," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 251-265, May.

    More about this item

    Keywords

    labor market density; wage equation;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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