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Technology diffusion and the spatial distribution of wages in the US

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Abstract

What explains the spatial distribution of wages across US counties? I find that two of the most important factors are spatial technology diffusion and externalities due to the aggregate scale of production. One empirical finding supporting the importance of spatial technology diffusion is that average wages in a county decrease with the average level of schooling in neighboring counties when employment in the county and average wages in neighboring counties are held constant. All empirical results are obtained using a novel instrument for (endogenous) employment at the county-level and take into account other factors (e.g. productivity-differences across states, climate) that may determine wages.

Suggested Citation

  • Antonio Ciccone, 1997. "Technology diffusion and the spatial distribution of wages in the US," Economics Working Papers 500, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 1999.
  • Handle: RePEc:upf:upfgen:500
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    Cited by:

    1. Bernard, Andrew B. & Redding, Stephen J. & Schott, Peter K. & Simpson, Helen, 2002. "Factor Price Equalization in the UK?," CEPR Discussion Papers 3523, C.E.P.R. Discussion Papers.
    2. Bottazzi, Laura, 2001. "Globalization and local proximity in innovation: A dynamic process," European Economic Review, Elsevier, vol. 45(4-6), pages 731-741, May.

    More about this item

    Keywords

    US spatial wage distribution; spatial technology diffusion; dynamic spatial externalities; spatial fixed effects;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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