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Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital

Author

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  • Beckstead, Desmond
  • Brown, W. Mark
  • Guo, Yusu
  • Newbold, Bruce

Abstract

Using 2001 Census data, this paper investigates the extent to which the urban-rural gap in the earnings of employed workers is associated with human capital composition and agglomeration economies. Both factors have been theoretically and empirically linked to urban-rural earnings differences. Agglomeration economies-the productivity enhancing effects of the geographic concentration of workers and firms-may underlie these differences as they may be stronger in larger urban centres. But human capital composition may also drive the urban-rural earnings gap if workers with higher levels of education and/or experience are more prevalent in cities. The analysis finds that up to one-half of urban-rural earnings differences are related to human capital composition. It also demonstrates that agglomeration economies related to city size are associated with earnings levels, but their influence is significantly reduced by the inclusion of controls for human capital.

Suggested Citation

  • Beckstead, Desmond & Brown, W. Mark & Guo, Yusu & Newbold, Bruce, 2010. "Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital," The Canadian Economy in Transition 2010020e, Statistics Canada, Economic Analysis Division.
  • Handle: RePEc:stc:stcp1e:2010020e
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    File URL: http://www5.statcan.gc.ca/olc-cel/olc.action?ObjId=11-622-M2010020&ObjType=46&lang=en&limit=0
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    Citations

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    Cited by:

    1. SĂ©bastien Breau & Dieter F. Kogler & Kenyon C. Bolton, 2014. "On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities," Economic Geography, Clark University, vol. 90(4), pages 351-373, October.
    2. Benjamin Dachis, 2015. "Tackling Traffic: The Economic Cost of Congestion in Metro Vancouver," e-briefs 206, C.D. Howe Institute.
    3. K. Bruce Newbold & W. Mark Brown, 2015. "The Urban–Rural Gap In University Attendance: Determinants Of University Participation Among Canadian Youth," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 585-608, September.
    4. Ben Dachis, 2013. "Cars, Congestion and Costs: A New Approach to Evaluating Government Infrastructure Investment," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 385, July.

    More about this item

    Keywords

    Business performance and ownership; Education; training and learning; Educational attainment; Labour; Regional and urban profiles; Wages; salaries and other earnings;

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