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A comprehensive analysis of the wage curve in Brazil: Non-linearities, urban size, and the spatial dimension

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  • Ana Barufi
  • Eduardo Haddad
  • Peter Nijkamp

Abstract

Agglomeration economies have a relevant impact on local labour markets. The interaction of workers and firms in dense urban areas may generate productivity advantages that result in higher wages. City size has an important impact on the relative bargaining power of workers and firms in the labour market. When analysing the relationship of local wages and the business cycle, wage flexibility, measured by the wage curve, is higher in informal sectors in less dense areas in Brazil. Therefore, large agglomerations are supposed to provide a higher bargaining power for workers, as they have further job opportunities. In addition, labour market dualism is an essential ingredient in the evaluation of the wage curve in developing economies. However, this type of analysis should be conducted in the adequate regional level (labour market areas), mking it possible to find a relevant impact of city size on the relative bargaining power of workers and firms.

Suggested Citation

  • Ana Barufi & Eduardo Haddad & Peter Nijkamp, 2016. "A comprehensive analysis of the wage curve in Brazil: Non-linearities, urban size, and the spatial dimension," ERSA conference papers ersa16p279, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa16p279
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    More about this item

    Keywords

    wage curve; city size; labour market;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market

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