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Endogenous local labour markets, regional aggregation and agglomeration economies

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  • Jordy Meekes
  • Wolter H. J. Hassink

Abstract

We examine the role of spatial unit size in measuring the urban wage premium. Using Dutch administrative data, we define local labour markets (LLMs) based on employees’ commuting outcomes, gender and educational attainment. We show that high-educated employees and male employees have a relatively large LLM. Using a continuum of regional aggregations, we find that urban wage premium estimates increase over the level of aggregation, also for different subgroups of employees. We show that the modifiable areal unit problem (MAUP) does not explain this pattern, consistent with stronger agglomeration externalities at higher regional aggregation levels.

Suggested Citation

  • Jordy Meekes & Wolter H. J. Hassink, 2023. "Endogenous local labour markets, regional aggregation and agglomeration economies," Regional Studies, Taylor & Francis Journals, vol. 57(1), pages 13-25, January.
    • Handle: RePEc:taf:regstd:v:57:y:2023:i:1:p:13-25
    DOI: 10.1080/00343404.2022.2050893
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    3. Michael Coelli & James Maccarrone & Jeff Borland, 2023. "The dragon Down Under: the regional labour market impact of growth in Chinese imports to Australia," Regional Studies, Taylor & Francis Journals, vol. 57(11), pages 2148-2163, November.
    4. Meekes, Jordy & Hassink, Wolter H.J., 2022. "Gender differences in job flexibility: Commutes and working hours after job loss," Journal of Urban Economics, Elsevier, vol. 129(C).
    5. Weisbrod, Glen & Hensher, David A., 2023. "Improving transportation project evaluation by recognizing the role of spatial scale and context in measuring non-user economic benefits," Transport Policy, Elsevier, vol. 144(C), pages 80-89.
    6. Laws, A., 2020. "Localised employment spillovers," Cambridge Working Papers in Economics 2067, Faculty of Economics, University of Cambridge.
    7. Jordy Meekes, 2022. "Agglomeration Economies and the Urban Wage Premium in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 25(1), pages 25-54.
    8. Almeida, Eloiza R.F. & Araújo, Veneziano & Gonçalves, Solange L., 2022. "Urban wage premium for women: evidence across the wage distribution," World Development, Elsevier, vol. 159(C).

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    14. Jordy Meekes, 2022. "Agglomeration Economies and the Urban Wage Premium in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 25(1), pages 25-54.
    15. Perl, Maximilian, 2023. "Agglomerations, tasks and wage growth," Ruhr Economic Papers 999, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Guangliang Yang & Lixing Li & Shihe Fu, 2020. "Do rural migrants benefit from labor market agglomeration economies? Evidence from Chinese cities," Growth and Change, Wiley Blackwell, vol. 51(3), pages 910-931, September.
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    More about this item

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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