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Regional Wage Differences In The Netherlands: Micro Evidence On Agglomeration Externalities

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  • Stefan P.T. Groot
  • Henri L.F. Groot
  • Martijn J. Smit

Abstract

type="main"> Based on micro data on individual workers for the period 2000–2005, we show that wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics. Remaining effects are partially explained by variations in employment density, with an elasticity of about 4.8 percent, and by Marshall-Arrow-Romer externalities, where doubling the local share of a (two-digit) industry results in a 2.9 percent higher productivity. We also find evidence for small negative effects of competition (Porter externalities) and diversity (Jacobs externalities).

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  • Stefan P.T. Groot & Henri L.F. Groot & Martijn J. Smit, 2014. "Regional Wage Differences In The Netherlands: Micro Evidence On Agglomeration Externalities," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 503-523, June.
    • Handle: RePEc:bla:jregsc:v:54:y:2014:i:3:p:503-523
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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