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Regional diversification and intra-regional wage inequality in the Netherlands

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  • Nicola Cortinovis
  • Dongmiao Zhang
  • Ron Boschma

Abstract

The literature has drawn little attention to the relationship between industrial dynamics (i.e. the rise and fall of industries) and intra-regional wage inequality. This explorative study examines the relationship between industry dynamics and wage inequality in NUTS-3 regions in the Netherlands in the period 2010-2019. While the literature has shown that related diversification in more complex industries enhances economic growth in regions but also inequality between regions, our study shows that related diversification in less complex industries tends to reduce wage inequality within a region. This implies it remains a policy challenge to combine smart and inclusive growth in regions. Our study also showed that there is no significant relationship between exit of industries and regional inequality, with one exception: unrelated low-complex exits tend to increase intra-regional wage inequality. Overall, these findings suggest that related diversification in less complex industries tends to bring benefits in terms of inclusive growth, while unrelated exits in less complex industries tend to do the opposite.

Suggested Citation

  • Nicola Cortinovis & Dongmiao Zhang & Ron Boschma, 2022. "Regional diversification and intra-regional wage inequality in the Netherlands," Papers in Evolutionary Economic Geography (PEEG) 2216, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2022.
  • Handle: RePEc:egu:wpaper:2216
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    References listed on IDEAS

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    More about this item

    Keywords

    intra-regional inequality; regional inequality; relatedness; structural change; inclusive growth;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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