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Regional wage differentials - does distance matter?

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  • Morten Marott Larsen

Abstract

This paper uses econometric methods to analyse causes of regional wage differentials in Denmark for the period1996-1999 and quantifies the importance of spatial proximity. Grouped data sets are used. Two concepts of distance are investigated. The first assumes that there is a positive production externality present in a centre that declines as the distance to the centre increases. Different definitions of a centre are tested. The second distance concept is commuting distance. Both distance measures have the expected sign and are significant, but the effects are small. JEL classification: J31 Key words: Wage differentials, distance, grouped data.

Suggested Citation

  • Morten Marott Larsen, 2003. "Regional wage differentials - does distance matter?," ERSA conference papers ersa03p418, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa03p418
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa03/cdrom/papers/418.pdf
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    References listed on IDEAS

    as
    1. Jerry Hausman, 2001. "Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 57-67, Fall.
    2. Dumond, J Michael & Hirsch, Barry T & Macpherson, David A, 1999. "Wage Differentials across Labor Markets and Workers: Does Cost of Living Matter?," Economic Inquiry, Western Economic Association International, vol. 37(4), pages 577-598, October.
    3. Albaek, K. & Asplund, R. & Blomskog, S. & Barth, E. & Guomundsson,B.R. & Karlsson, V. & Madsen, E.S., 1999. "Domensions of the Wage-Unemployment Relationship in the Nordic Countries: Wage Flexibility without Wage Curves," Papers 99-24, Carleton - School of Public Administration.
    4. Charles Brown, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(1), pages 113-134.
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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