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Can Neg Explain the Spatial Distribution of Wages of Chile?

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  • Dusan Paredes

Abstract

The new economic geography (NEG) has been tested to explain the spatial concentration of wages in developed countries, but it has not been evaluated for developing countries where the excessive spatial concentration seems to be related with negative consequences on the economic development. This paper covers this gap in the literature estimating by first time a NEG model for a developing country such as Chile, pursuing two research question: (1) Can the NEG explain the spatial distribution of wages in a developing country as Chile?; and (2) How can the NEG be used to infer information about the future level of spatial concentration of wages in Chile? The results suggest that the case of Chile is poorly explained by the NEG and even higher level of spatial concentration should be expected in the future. These results indicate that the empirical application of NEG is not trivial for developing countries, and some considerations such as inclusion of the first nature or analysis at micro data level must be incorporated by future researches.

Suggested Citation

  • Dusan Paredes, 2015. "Can Neg Explain the Spatial Distribution of Wages of Chile?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 106(1), pages 65-77, February.
    • Handle: RePEc:bla:tvecsg:v:106:y:2015:i:1:p:65-77
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    File URL: http://hdl.handle.net/10.1111/tesg.12088
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    1. Victor Iturra, 2018. "Amenity Decomposition: The Role Played by Firms and Workers in Explaining Spatial Wage Differences in Chile," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 109(4), pages 542-560, September.
    2. Dusan Paredes, 2013. "The Role of Human Capital, Market Potential and Natural Amenities in Understanding Spatial Wage Disparities in Chile," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(2), pages 154-175, June.

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