Wage Effects from Changes in Local Human Capital in Britain
This paper examines the wage effects arising from changing local human capital in the labour market areas of Britain. Employing wage regressions, it is found that individuals' wages are positively associated with changes in the employment shares of high-paid occupation workers in the British travel-to-work-areas for the late 1990s. I examine this positive association for different occupational groups (defined by pay) in order to disentangle between production function and consumer demand driven theoretical justifications. The former refer to production complementarities or wider productivity spillovers arising in areas with high shares of high-skill workers. According to the latter, the presence of a high income workforce in the economy boosts the demand for consumer services leading to an increase in low-pay, service related employment. As these services are non-traded, the increased demand for local low-paid services should be reflected in a wage premium for the relevant low-paid occupation employees in the areas with larger shares of high-paid workers. The wage impact is found to be stronger and significant for the bottom occupational quintile compared to the middle-occupational quintiles and using also sectoral controls the paper argues to provide some preliminary evidence for the existence of consumer demand effects. The empirical investigation addresses potential sources of biases controlling for time invariant unobserved area-specific characteristics and unobserved individual characteristics. Nevertheless, the paper points to a number of caveats of the analysis that warrant future research.
|Date of creation:||Jan 2010|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maarten Goos & Alan Manning, 2007.
"Lousy and Lovely Jobs: The Rising Polarization of Work in Britain,"
The Review of Economics and Statistics,
MIT Press, vol. 89(1), pages 118-133, February.
- Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
- Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics 20002, London School of Economics and Political Science, LSE Library.
- Ian Richard Gordon & Ioannis Kaplanis, 2014.
"Accounting for Big-City Growth in Low-Paid Occupations: Immigration and/or Service-Class Consumption,"
Clark University, vol. 90(1), pages 67-90, 01.
- Gordon, Ian & Kaplanis, Ioannis, 2012. "Accounting for Big City Growth in Low Paid Occupations: Immigration and/or Service Class Consumption," Working Papers 2072/184038, Universitat Rovira i Virgili, Department of Economics.
- Ian Gordon & Ioannis Kaplanis, 2012. "Accounting for Big City Growth in Low Paid Occupations: Immigration and/or Service Class Consumption," SERC Discussion Papers 0106, Spatial Economics Research Centre, LSE.
- Ian Gordon & Ioannis Kaplanis, 2012. "Accounting for big city growth in low paid occupations: immigration and/or service class consumption," LSE Research Online Documents on Economics 44436, London School of Economics and Political Science, LSE Library.
- Edward L. Glaeser & David C. Mare, 1994.
"Cities and Skills,"
NBER Working Papers
4728, National Bureau of Economic Research, Inc.
- Antonio Ciccone & Robert E. Hall, 1993.
"Productivity and the Density of Economic Activity,"
NBER Working Papers
4313, National Bureau of Economic Research, Inc.
- Ioannis Kaplanis, 2010.
"Local Human Capital and Its Impact on Local Employment Chances in Britain,"
SERC Discussion Papers
0040, Spatial Economics Research Centre, LSE.
- Ioannis Kaplanis, 2010. "Local human capital and its impact on local employment chances in Britain," LSE Research Online Documents on Economics 33503, London School of Economics and Political Science, LSE Library.
- Ioannis Kaplanis, 2006. "The Geography of Employment Polarisation in Britain," ERSA conference papers ersa06p597, European Regional Science Association.
- Tony Champion & Mike Coombes, 2007. "Using the 2001 census to study human capital movements affecting Britain's larger cities: insights and issues," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 170(2), pages 447-467.
- Stephen Gibbons & Anne Green & Paul Gregg & Stephen Machin, 2005. "Is Britain Pulling Apart? Area Disparities in Employment, Education and Crime," The Centre for Market and Public Organisation 05/120, Department of Economics, University of Bristol, UK.
- Ian R. Gordon & Philip McCann, 2005. "Innovation, agglomeration, and regional development," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 523-543, October.
When requesting a correction, please mention this item's handle: RePEc:cep:sercdp:0039. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.