IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/halshs-04423262.html
   My bibliography  Save this paper

Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019

Author

Listed:
  • Luis Bauluz

    (WIL - World Inequality Lab, CUNEF Universidad)

  • Paweł Bukowski

    (UCL - University College of London [London], PAN - Polska Akademia Nauk = Polish Academy of Sciences = Académie polonaise des sciences)

  • Mark Fransham

    (University of Oxford, LSE - London School of Economics and Political Science)

  • Annie Lee

    (University Mc Gill)

  • Margarita López Forero

    (Université Paris-Saclay, UEVE - Université d'Évry-Val-d'Essonne)

  • Filip Novokmet

    (Universität Bonn = University of Bonn, WIL - World Inequality Lab)

  • Sébastien Breau

    (University Mc Gill)

  • Neil Lee

    (LSE - London School of Economics and Political Science)

  • Clément Malgouyres

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Moritz Schularick

    (Kiel institute, Institut d'Études Politiques [IEP] - Paris)

  • Verdugo Gregory

    (Université Paris-Saclay, UEVE - Université d'Évry-Val-d'Essonne)

Abstract

The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between national and subnational economic inequality. This paper presents the first systematic attempt to create internationally comparable evidence showing how different countries perform in terms of geographic wage inequalities. We create crosscountry comparable measures of spatial wage disparities between and within similarly-defined local labour market areas (LLMAs) for Canada, France, (West) Germany, the UK and the US since the 1970s, and assess their contribution to national inequality. By the end of the 2010s, spatial inequalities in LLMA mean wages are similar in Canada, France, Germany and the UK; the US exhibits the highest degree of spatial inequality. Over the study period, spatial inequalities have nearly doubled in all countries, except for France where spatial inequalities have fallen back to 1970s levels. Due to a concomitant increase in within-place inequality, the contribution of places in explaining national wage inequality has remained fairly constant over the 40-year study period, except in the UK where we document a significant increase. Whilst common global social, economic and technological shocks are important drivers of spatial inequality, this variation in levels and trends of spatial inequality opens the way to comparative research exploring the role of national institutions in mediating how global shocks translate into economic disparities between places.

Suggested Citation

  • Luis Bauluz & Paweł Bukowski & Mark Fransham & Annie Lee & Margarita López Forero & Filip Novokmet & Sébastien Breau & Neil Lee & Clément Malgouyres & Moritz Schularick & Verdugo Gregory, 2023. "Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019," Working Papers halshs-04423262, HAL.
    • Handle: RePEc:hal:wpaper:halshs-04423262
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04423262
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-04423262/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Luis Ayala & Javier Martín‐Román & Juan Vicente, 2020. "The contribution of the spatial dimension to inequality: A counterfactual analysis for OECD countries," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 447-477, June.
    2. Florian Bonnet & Hippolyte d’Albis & Aurélie Sotura, 2021. "Income Inequality across French Departments over the Last 100 Years," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 526-527, pages 49-69.
    3. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    4. Facundo Alvaredo & Anthony Atkinson & Lucas Chancel & Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2016. "Distributional National Accounts (DINA) Guidelines : Concepts and Methods used in WID.world," Working Papers halshs-02794308, HAL.
    5. Lessmann, Christian, 2014. "Spatial inequality and development — Is there an inverted-U relationship?," Journal of Development Economics, Elsevier, vol. 106(C), pages 35-51.
    6. Filip Novokmet & Thomas Piketty & Gabriel Zucman, 2018. "From Soviets to oligarchs: inequality and property in Russia 1905-2016," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 189-223, June.
    7. Nathaniel Baum-Snow & Ronni Pavan, 2013. "Inequality and City Size," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1535-1548, December.
    8. Garbinti, Bertrand & Goupille-Lebret, Jonathan & Piketty, Thomas, 2018. "Income inequality in France, 1900–2014: Evidence from Distributional National Accounts (DINA)," Journal of Public Economics, Elsevier, vol. 162(C), pages 63-77.
    9. Roine, Jesper & Waldenström, Daniel, 2014. "Long-Run Trends in the Distribution of Income and Wealth," Working Paper Series 1021, Research Institute of Industrial Economics.
    10. Enrico Moretti, 2013. "Real Wage Inequality," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 65-103, January.
    11. Simon Kuznets & Elizabeth Jenks, 1953. "Shares of Upper Income Groups in Income and Savings (1953)," NBER Books, National Bureau of Economic Research, Inc, number kuzn53-1, March.
    12. Jorge De La Roca & Diego Puga, 2017. "Learning by Working in Big Cities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 106-142.
    13. Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2477-2502, November.
    14. Verdugo, Gregory, 2014. "The great compression of the French wage structure, 1969–2008," Labour Economics, Elsevier, vol. 28(C), pages 131-144.
    15. Tito Boeri & Andrea Ichino & Enrico Moretti & Johanna Posch, 2021. "Wage Equalization and Regional Misallocation: Evidence from Italian and German Provinces [“Regional Wage Disparities and Migration.”]," Journal of the European Economic Association, European Economic Association, vol. 19(6), pages 3249-3292.
    16. Simon Kuznets & Elizabeth Jenks, 1953. "Shares of Upper Income Groups in Savings," NBER Chapters, in: Shares of Upper Income Groups in Income and Savings (1953), pages 171-218, National Bureau of Economic Research, Inc.
    17. Anthony Atkinson & Thomas Piketty, 2010. "Top Incomes : A Global Perspective," PSE-Ecole d'économie de Paris (Postprint) halshs-00754875, HAL.
    18. Brian Bell & John Van Reenen, 2010. "Bankers' Pay and Extreme Wage Inequality in the UK," CEP Reports 21, Centre for Economic Performance, LSE.
    19. David Card & Jesse Rothstein & Moises Yi, 2021. "Location, Location, Location," Working Papers 21-32, Center for Economic Studies, U.S. Census Bureau.
    20. Wolfgang Dauth & Michaela Fuchs & Anne Otto, 2018. "Long‐run processes of geographical concentration and dispersion: Evidence from Germany," Papers in Regional Science, Wiley Blackwell, vol. 97(3), pages 569-593, August.
    21. Duranton, Gilles & Puga, Diego, 2005. "From sectoral to functional urban specialisation," Journal of Urban Economics, Elsevier, vol. 57(2), pages 343-370, March.
    22. Nicole Fortin & David A. Green & Thomas Lemieux & Kevin Milligan & W. Craig Riddell, 2012. "Canadian Inequality: Recent Developments and Policy Options," Canadian Public Policy, University of Toronto Press, vol. 38(2), pages 121-145, June.
    23. Andrés Rodríguez-Pose, 2018. "CommentaryThe revenge of the places that don’t matter (and what to do about it)," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 11(1), pages 189-209.
    24. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    25. Andres Rodriguez-Pose, 2018. "The revenge of the places that don?t matter (and what to do about it)," Papers in Evolutionary Economic Geography (PEEG) 1805, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
    26. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum, 2014. "The Rise Of The East And The Far East: German Labor Markets And Trade Integration," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1643-1675, December.
    27. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    28. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1553-1623.
    29. Anthony Atkinson & Thomas Piketty, 2007. "Top incomes over the twentieth century: A contrast between continental european and english-speaking countries," Post-Print halshs-00754859, HAL.
    30. Furceri, Davide & Loungani, Prakash, 2018. "The distributional effects of capital account liberalization," Journal of Development Economics, Elsevier, vol. 130(C), pages 127-144.
    31. Joan R. Rosés & Nikolaus Wolf, 2018. "Regional Economic Development in Europe, 1900-2010: A Description of the Patterns," CESifo Working Paper Series 6952, CESifo.
    32. Fatih Guvenen & Luigi Pistaferri & Giovanni L. Violante, 2022. "Global trends in income inequality and income dynamics: New insights from GRID," Quantitative Economics, Econometric Society, vol. 13(4), pages 1321-1360, November.
    33. Facundo Alvaredo & Thomas Piketty & Emmanuel Saez & Lucas Chancel & Gabriel Zucman, 2018. "World Inequality Report 2018," PSE-Ecole d'économie de Paris (Postprint) halshs-01885458, HAL.
    34. Barrios, Salvador & Strobl, Eric, 2009. "The dynamics of regional inequalities," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 575-591, September.
    35. Anthony B Atkinson & François Bourguignon, 2014. "Handbook of Income Distribution," PSE-Ecole d'économie de Paris (Postprint) halshs-02923231, HAL.
    36. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 843-881.
    37. Nathaniel Baum-Snow & Matthew Freedman & Ronni Pavan, 2018. "Why Has Urban Inequality Increased?," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 1-42, October.
    38. Richard Florida & Charlotta Mellander, 2016. "The Geography of Inequality: Difference and Determinants of Wage and Income Inequality across US Metros," Regional Studies, Taylor & Francis Journals, vol. 50(1), pages 79-92, January.
    39. Bozio, Antoine & Breda, Thomas & Guillot, Malka, 2020. "The Contribution of Payroll Taxation to Wage Inequality in France," IZA Discussion Papers 13317, Institute of Labor Economics (IZA).
    40. David H. Autor, 2019. "Work of the Past, Work of the Future," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 1-32, May.
    41. Lessmann, Christian & Seidel, André, 2017. "Regional inequality, convergence, and its determinants – A view from outer space," European Economic Review, Elsevier, vol. 92(C), pages 110-132.
    42. Anna Stansbury & Dan Turner & Ed Balls, 2023. "Tackling the UK’s regional economic inequality: binding constraints and avenues for policy intervention," Contemporary Social Science, Taylor & Francis Journals, vol. 18(3-4), pages 318-356, August.
    43. Atkinson, A. B. & Piketty, Thomas (ed.), 2007. "Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries," OUP Catalogue, Oxford University Press, number 9780199286881.
    44. Kemeny, Thomas & Storper, Michael, 2020. "Superstar cities and left-behind places: disruptive innovation, labor demand, and interregional inequality," LSE Research Online Documents on Economics 103312, London School of Economics and Political Science, LSE Library.
    45. Daron Acemoglu & Pascual Restrepo, 2022. "Tasks, Automation, and the Rise in U.S. Wage Inequality," Econometrica, Econometric Society, vol. 90(5), pages 1973-2016, September.
    46. Thomas Philippon & Ariell Reshef, 2012. "Wages and Human Capital in the U.S. Finance Industry: 1909--2006," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(4), pages 1551-1609.
    47. Cecile Gaubert & Patrick Kline & Damián Vergara & Danny Yagan, 2021. "Trends in US Spatial Inequality: Concentrating Affluence and a Democratization of Poverty," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 520-525, May.
    48. Rebecca Diamond, 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000," American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    49. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    50. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
    51. Ganong, Peter & Shoag, Daniel, 2017. "Why has regional income convergence in the U.S. declined?," Journal of Urban Economics, Elsevier, vol. 102(C), pages 76-90.
    52. Peter H. Egger & Sergey Nigai & Nora M. Strecker, 2019. "The Taxing Deed of Globalization," American Economic Review, American Economic Association, vol. 109(2), pages 353-390, February.
    53. Neil Lee & Paul Sissons & Katy Jones, 2016. "The Geography of Wage Inequality in British Cities," Regional Studies, Taylor & Francis Journals, vol. 50(10), pages 1714-1727, October.
    54. David H. Autor, 2015. "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 3-30, Summer.
    55. Michael Storper, 2018. "Separate Worlds? Explaining the current wave of regional economic polarization," Journal of Economic Geography, Oxford University Press, vol. 18(2), pages 247-270.
    56. Atkinson, A. B. & Piketty, Thomas (ed.), 2010. "Top Incomes: A Global Perspective," OUP Catalogue, Oxford University Press, number 9780199286898.
    57. A. B. Atkinson, 2005. "Top incomes in the UK over the 20th century," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 325-343, March.
    58. Stephen Gibbons & Henry G. Overman & Panu Pelkonen, 2014. "Area Disparities in Britain: Understanding the Contribution of People vs. Place Through Variance Decompositions," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(5), pages 745-763, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kemeny, Thomas & Storper, Michael, 2020. "Superstar cities and left-behind places: disruptive innovation, labor demand, and interregional inequality," LSE Research Online Documents on Economics 103312, London School of Economics and Political Science, LSE Library.
    2. Bukowski, Pawel & Novokmet, Filip, 2019. "Between communism and capitalism: long-term inequality in Poland, 1892-2015," LSE Research Online Documents on Economics 102834, London School of Economics and Political Science, LSE Library.
    3. Pawel Bukowski & Filip Novokmet, 2019. "Between Communism and Capitalism: Long-Term Inequality in Poland, 1892- 2015," World Inequality Lab Working Papers hal-02876995, HAL.
    4. Pawel Bukowski & Filip Novokmet, 2019. "Between Communism and Capitalism: Long-Term Inequality in Poland, 1892- 2015," Working Papers hal-02876995, HAL.
    5. Bukowski, Pawel & Novokmet, Filip, 2021. "Between communism and capitalism: long-term inequality in Poland, 1892–2015," LSE Research Online Documents on Economics 110221, London School of Economics and Political Science, LSE Library.
    6. Paweł Bukowski & Filip Novokmet, 2021. "Between communism and capitalism: long-term inequality in Poland, 1892–2015," Journal of Economic Growth, Springer, vol. 26(2), pages 187-239, June.
    7. Piketty, Thomas & Bozio, Antoine & Garbinti, Bertrand & Goupille-Lebret, Jonathan & Guillot, Malka, 2020. "Predistribution vs. Redistribution: Evidence from France and the U.S," CEPR Discussion Papers 15415, C.E.P.R. Discussion Papers.
    8. Bukowski, Pawel & Novokmet, Filip, 2019. "Between communism and capitalism: long-term inequality in Poland, 1892-2015," LSE Research Online Documents on Economics 102814, London School of Economics and Political Science, LSE Library.
    9. Bartels, Charlotte & Waldenström, Daniel, 2021. "Inequality and top incomes," GLO Discussion Paper Series 959, Global Labor Organization (GLO).
    10. Lucas Chancel, 2019. "Ten facts about income inequality in advanced economies," Working Papers hal-02876982, HAL.
    11. Pawel Bukowski & Filip Novokmet, 2019. "Between communism and capitalism: long-term inequality in Poland, 1892-2015," CEP Discussion Papers dp1628, Centre for Economic Performance, LSE.
    12. Kemeny, Tom & Storper, Michael, 2022. "The changing shape of spatial inequality in the United States," SocArXiv wnd8t, Center for Open Science.
    13. Andrés Rodríguez-Pose & Michael Storper, 2020. "Housing, urban growth and inequalities: The limits to deregulation and upzoning in reducing economic and spatial inequality," Urban Studies, Urban Studies Journal Limited, vol. 57(2), pages 223-248, February.
    14. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    15. Thomas Blanchet & Ignacio Flores & Marc Morgan, 2022. "The weight of the rich: improving surveys using tax data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 119-150, March.
    16. Antoine Bozio & Bertrand Garbinti & Jonathan Goupille-Lebret & Malka Guillot & Thomas Piketty, 2018. "Inequality and Redistribution in France, 1990-2018: Evidence from Post-Tax Distributional National Accounts (DINA)," Working Papers hal-02878151, HAL.
    17. Facundo Alvaredo & Lydia Assouad & Thomas Piketty, 2019. "Measuring lnequality in the Middle East 1990–2016: The World’s Most Unequal Region?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(4), pages 685-711, December.
    18. Garbinti, Bertrand & Goupille-Lebret, Jonathan & Piketty, Thomas, 2018. "Income inequality in France, 1900–2014: Evidence from Distributional National Accounts (DINA)," Journal of Public Economics, Elsevier, vol. 162(C), pages 63-77.
    19. Kleven, Henrik J. & Luttmer, Erzo F.P., 2018. "A special issue of the Journal of Public Economics: Honoring the work of Sir Anthony B. Atkinson (1944–2017)," Journal of Public Economics, Elsevier, vol. 162(C), pages 1-3.
    20. Roman Bobilev & Anne Boschini & Jesper Roine, 2020. "Women in the Top of the Income Distribution: What Can We Learn From LIS-Data?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(1), pages 63-107, March.

    More about this item

    Keywords

    regional inequality; wage inequality; local labour markets;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-04423262. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.