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Wage differentials and the spatial concentration of high-technology industries

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  • Elsie Echeverri-Carroll
  • Sofia G. Ayala

Abstract

Workers in high-tech cities earn raw wages that are on average 17% higher than wages of workers in other cities. Using a large sample from the 5% PUMS of the 2000 Census of Population, this paper presents econometric evidence of a 'tech-city wage premium' of approximately 4.6% that is not the result of higher-ability people self-selecting to live in high-tech cities, but rather the result of high-tech cities actually making workers more productive. Although knowledge spillovers are difficult to assess, we use the concepts of the new economic geography and evidence from empirical studies of high-technology regions, such as Silicon Valley and Austin, Texas, to support the view that workers who live in high-tech cities might be more productive because they benefit from a larger supply of knowledge spillovers than workers who live in low-tech cities. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.

Suggested Citation

  • Elsie Echeverri-Carroll & Sofia G. Ayala, 2009. "Wage differentials and the spatial concentration of high-technology industries," Papers in Regional Science, Wiley Blackwell, vol. 88(3), pages 623-641, August.
  • Handle: RePEc:bla:presci:v:88:y:2009:i:3:p:623-641
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    References listed on IDEAS

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    Cited by:

    1. Winters, John V., 2014. "STEM graduates, human capital externalities, and wages in the U.S," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 190-198.
    2. Thomas Kemeny & Taner Osman, 2018. "The Wider Impacts of High-Technology Employment: Evidence from U.S. Cities," Working Papers 89, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    3. Alberto Dalmazzo & Guido de Blasio, 2011. "Amenities and skill‐biased agglomeration effects: Some results on Italian cities," Papers in Regional Science, Wiley Blackwell, vol. 90(3), pages 503-527, August.
    4. Sébastien Breau & Dieter F. Kogler & Kenyon C. Bolton, 2014. "On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities," Economic Geography, Clark University, vol. 90(4), pages 351-373, October.
    5. Tommaso Ciarli & Alberto Marzucchi & Edgar Salgado & Maria Savona, 2018. "The Effect of R&D Growth on Employment and Self-Employment in Local Labour Markets," SPRU Working Paper Series 2018-08, SPRU - Science and Technology Policy Research, University of Sussex.
    6. repec:eee:respol:v:47:y:2018:i:1:p:209-217 is not listed on IDEAS
    7. Neil Lee & Stephen Clarke, 2017. "Who gains from high-tech growth? High-technology multipliers, employment and wages in Britain," SPRU Working Paper Series 2017-14, SPRU - Science and Technology Policy Research, University of Sussex.
    8. Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, vol. 13(1), pages 1-22, January.
    9. Neil Lee & Andrés Rodríguez-Pose, 2016. "Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities," Papers in Evolutionary Economic Geography (PEEG) 1618, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2016.
    10. repec:spr:jknowl:v:8:y:2017:i:4:d:10.1007_s13132-016-0431-3 is not listed on IDEAS

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