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Wage differentials and the spatial concentration of high-technology industries

  • Elsie Echeverri-Carroll
  • Sofia G. Ayala
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    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.

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    Article provided by Wiley Blackwell in its journal Papers in Regional Science.

    Volume (Year): 88 (2009)
    Issue (Month): 3 (08)
    Pages: 623-641

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    Handle: RePEc:bla:presci:v:88:y:2009:i:3:p:623-641
    Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190

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