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The effects of agglomeration on wages: evidence from the micro-level

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  • Bernard Fingleton

    () (Department of Economics, University of Strathclyde)

  • Simonetta Longhi

    () (Institute for Social and Economic Research (ISER), University of Essex.)

Abstract

This paper estimates individual wage equations in order to test two rival non-nested theories of economic agglomeration, namely New Economic Geography (NEG), as represented by the NEG wage equation and urban economic (UE) theory , in which wages relate to employment density. The paper makes an original contribution by evidently being the first empirical paper to examine the issue of agglomeration processes associated with contemporary theory working with micro-level data, highlighting the role of gender and other individual-level characteristics. For male respondents, there is no significant evidence that wage levels are an outcome of the mechanisms suggested by NEG or UE theory, but this is not the case for female respondents. We speculate on the reasons for the gender difference.

Suggested Citation

  • Bernard Fingleton & Simonetta Longhi, 2011. "The effects of agglomeration on wages: evidence from the micro-level," Working Papers 1124, University of Strathclyde Business School, Department of Economics.
  • Handle: RePEc:str:wpaper:1124
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nabavi, Pardis, 2015. "Increasing Wage Gap, Spatial Structure and Market Access: Evidence from Swedish Micro Data," Working Paper Series in Economics and Institutions of Innovation 409, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. repec:spr:chinre:v:10:y:2017:i:4:d:10.1007_s12187-016-9409-8 is not listed on IDEAS
    3. Juan Soto & Dusan Paredes, 2016. "Cities, Wages, And The Urban Hierarchy," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 596-614, September.
    4. Hamann, Silke & Niebuhr, Annekatrin & Peters, Jan Cornelius, 2016. "Benefits of dense labour markets: Evidence from transitions to employment in Germany," Economics Working Papers 2016-07, Christian-Albrechts-University of Kiel, Department of Economics.
    5. Justin Doran & Bernard Fingleton, 2015. "Resilience from the micro perspective," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 8(2), pages 205-223.
    6. Ulrich Zierahn, 2012. "The effect of market access on the labor market: Evidence from German reunification," MAGKS Papers on Economics 201239, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item

    Keywords

    urban economics; new economic geography; household panel data.;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D1 - Microeconomics - - Household Behavior
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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