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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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    1. repec:eee:respol:v:47:y:2018:i:1:p:209-217 is not listed on IDEAS
    2. Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, pages 1-22.
    3. 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.
    4. 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.
    5. Winters, John V., 2014. "STEM graduates, human capital externalities, and wages in the U.S," Regional Science and Urban Economics, Elsevier, pages 190-198.
    6. 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.
    7. 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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