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Can NEG Explain the Spatial Distribution of Wages of Chile?

Listed author(s):
  • Dusan Paredes

    ()

    (IDEAR - Department of Economics, Universidad Católica del Norte)

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 developingcountries 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 Chile and pursuing two research questions : 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 higher level of spatial concentration should be expected in the future. These results indicate that the empirical analysis ofNEG is not a direct extension toward developing countries, and some considerations such as inclusion of the rst nature or analysis at micro data level must be incorporated by future researches.

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File URL: https://sites.google.com/a/ucn.cl/wpeconomia/archivos/WP2010-02.pdf
File Function: First version, 2010
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Paper provided by Universidad Catolica del Norte, Chile, Department of Economics in its series Documentos de Trabajo en Economia y Ciencia Regional with number 02.

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Length: 28 pages
Date of creation: Sep 2010
Date of revision: Sep 2010
Handle: RePEc:cat:dtecon:dt201002
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  1. Roberto Duncan & J. Rodrigo Fuentes, 2005. "Convergencia Regional en Chile: Nuevos Tests, Viejos Resultados," Working Papers Central Bank of Chile 313, Central Bank of Chile.
  2. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The Spatial Distribution of Wages: Estimating the Helpman-Hanson Model for Germany," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 437-466.
  3. Brakman,Steven & Garretsen,Harry & van Marrewijk,Charles, 2009. "The New Introduction to Geographical Economics," Cambridge Books, Cambridge University Press, number 9780521875325, December.
  4. Diego Puga, 1996. "The Rise and Fall of Regional Inequalities," CEP Discussion Papers dp0314, Centre for Economic Performance, LSE.
  5. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311.
  6. COMBES, Pierre-Philippe & LAFOURCADE, Miren & THISSE, Jacques-François & TOUTAIN, Jean-Claude, "undated". "The rise and fall of spatial inequalities in France: A long-run perspective," CORE Discussion Papers RP 2306, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Patricio Aroca & Mariano Bosch, 2000. "Crecimiento, convergencia y espacio en las regiones chilenas: 1960 - 1998," Estudios de Economia, University of Chile, Department of Economics, vol. 27(2 Year 20), pages 199-224, December.
  8. Jens Suedekum, 2006. "Agglomeration And Regional Costs Of Living," Journal of Regional Science, Wiley Blackwell, vol. 46(3), pages 529-543.
  9. Henderson, Vernon, 2003. "The Urbanization Process and Economic Growth: The So-What Question," Journal of Economic Growth, Springer, vol. 8(1), pages 47-71, March.
  10. Ferreira, Francisco H G & Litchfield, Julie A, 1999. "Calm after the Storms: Income Distribution and Welfare in Chile, 1987-94," World Bank Economic Review, World Bank Group, vol. 13(3), pages 509-538, September.
  11. Dante Contreras, 2003. "Poverty and Inequality in a Rapid Growth Economy: Chile 1990-96," Journal of Development Studies, Taylor & Francis Journals, vol. 39(3), pages 181-200.
  12. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers 2767, C.E.P.R. Discussion Papers.
  13. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2004. "Spatial Wage Disparities: Sorting Matters!," CEPR Discussion Papers 4240, C.E.P.R. Discussion Papers.
  14. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
  15. repec:hal:wpaper:halshs-00349293 is not listed on IDEAS
  16. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
  17. Pierre-Philippe Combes & Miren Lafourcade & Jacques-François Thisse & Jean-Claude Toutain, 2008. "The rise and fall of spatial inequalities in France: A long-run perspective," Working Papers halshs-00586214, HAL.
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