No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Cities and the Growth of Wages among Young Workers: Evidence from the NLSY
Abstract
Human capital-based theories of cities suggest that large, economically diverse urban agglomerations increase worker productivity by increasing the rate at which individuals acquire skills. One largely unexplored implication of this theory is that workers in big cities should see faster growth in their earnings over time than comparable workers in smaller markets. This paper examines this implication using data on a sample of young male workers drawn from the National Longitudinal Survey of Youth 1979 Cohort. The results suggest that earnings growth does tend to be faster in large, economically diverse local labor markets—defined as counties and metropolitan areas—than in smaller, more specialized markets. Yet, when examined in greater detail, I also find that this association tends to be the product of faster wage growth due to job changes rather than faster wage growth experienced while on a particular job. This result is consistent with the idea that cities enhance worker productivity through a job search and matching process and, thus, that an important aspect of ‘learning’ in cities may involve individuals learning about what they do well.
... A large body of research supports a positive relationship between city size and growth in employment and population (Glaeser et al., 1995;Simon, 1998;Simon and Nardinelli, 2002;Simon, 2004;Glaeser and Shapiro, 2003;Shapiro, 2006). Studies also support a positive (although varying in magnitude) relationship between city size and wages (Di Addario and Patacchini, 2008;Wheeler, 2006;Glaeser and Maré, 2001;Wheeler, 2001). A positive effect on wages is supported by a 33% wage premium in large metropolitan areas compared to non-urban locations in the U.S. (Glaeser and Maré, 2001). ...
... A positive effect on wages is supported by a 33% wage premium in large metropolitan areas compared to non-urban locations in the U.S. (Glaeser and Maré, 2001). Several studies provide empirical results that support that the urban wage premia is not solely due to a concentration of workers with higher ability (Rosenthal and Strange, 2008;Glaeser and Maré, 2001;Wheeler, 2006;Glaeser and Gottlieb, 2009). This effect is typically attributed to increasing levels of transference of knowledge, so called 'knowledge spillovers': "Even if cities are no better educated than the hinterland, urban density will increase interactions and intellectual spillovers." ...
... Although increasing wages in general, Di Addario and Patacchini (2008) find that urbanization has no impact on individual returns on experience and decreases returns to education. Wheeler (2006) finds that larger cities increases wage growth, this effect is however not only attributed to an increased rate of acquiring skills. It is found that much of this wage growth is due to job changes, meaning that urbanization improves the search and matching process on the job market. ...
Urban environments are composed of urban population, urban infrastructure, city governance and commercial markets within cities. The rapid growth of emerging technologies for sensing and communicating data is being leveraged by commercial companies to create digital applications where machine learning applications analyze multiple kinds of data now available from instrumented infrastructure, public and private urban transactions and citizens' mobility to transform urban environments. This kind of transformation is our view of what enables a "digital city". Commercial markets are at the heart of this concept, with commercial applications of digital infrastructure rapidly developing, because data from multiple sources are more easily available and analyzed across multiple data layers drawn from different sectors and regions of the city. It is now possible to visualize multiple kinds of outcomes across an entire city and its markets, and to do "What if?" analysis using predictive analytics to generate new insights and financial models across a wide range of vertical urban services. The ability to visualize real time data and insights drawn from that data about the urban environment that surrounds real estate and identify its connection with real estate value provides an unprecedented potential for enhancing real estate development decisions, primarily through better forecasts for building utilization, more accurate assessment of the purchasing power of users of real estate, and by better risk assessment of real estate users. This article presents an analysis of the potential benefits of digital cities for real estate development decision making.
... If, as Glaeser and Maré (2001) and De la Roca and Puga (2014) argue, an urban wage growth premium is evidence of (or at least consistent with) faster human capital accumulation in cities, then for Britain either this mechanism is not at work or faster accumulation is for some reason not reflected in faster wage growth for current urban workers. Wheeler (2006) suggests that human capital accumulation as an explanation of an urban wage growth premium might be particularly important for younger workers. In the British context we find some evidence to support this hypothesis. ...
... This paper is specifically concerned with wage growth, that is, with the dynamic aspects of the productivity and selection hypotheses which have received much less consideration in the literature. Wheeler (2006) estimates the impact of density on annual wage growth and on the within-job and the between-job components of annual wage growth. Using a sample of young male workers in the US he finds that wage growth is positively associated with labour market size, and that this is due to between-job wage growth rather than within-job growth. ...
... If selection or spatial sorting explains the relationship between city size and wage growth, then including worker fixed effects in a panel data specification should make the effect of city size on wage growth disappear. Indeed, when Wheeler (2006) includes fixed effects he finds no significant effect of labour market size on either between-job or within-job wage growth. Our results when including fixed effects are consistent with this finding. ...
This paper is concerned with the urban wage premium and addresses two central issues about which the field has not yet reached a consensus: first, the extent to which sorting of high ability individuals into urban areas explains the urban wage premium and second, whether workers receive this wage premium immediately, or through faster wage growth over time. Using a large panel of worker-level data from Britain, we first demonstrate the existence of an urban premium for wage levels, which increases in city size. We next provide evidence of a city size premium on wage growth, but show that this effect is driven purely by the increase in wage that occurs in the first year that a worker moves to a larger location. Controlling for sorting on the basis of unobservables we find no evidence of an urban wage growth premium. Experience in cities does have some impact on wage growth, however. Specifically, we show that workers who have at some point worked in a city experience faster wage growth than those who have never worked in a city.
... While there is comprehensive empirical evidence of a positive impact of agglomeration on worker and firm productivity (Combes, Duranton, & Gobillon, 2008;Glaeser & Maré, 2001), much less is known about the significance of different mechanisms, as noted by Rosenthal and Strange (2004) and Combes and Gobillon (2015). Some studies explicitly differentiate between static and dynamic effects of agglomeration (e.g., Glaeser & Maré, 2001;Lehmer & Möller, 2010;Wheeler, 2006;Yankow, 2006) and also allow for heterogeneous effects across individual characteristics, in particular skill levels (e.g., Andersson, Klaesson, & Larsson, 2014;Bacolod, Blum, & Strange, 2009;Carlsen, Rattso, & Stokke, 2016;De la Roca & Puga, 2017;Matano & Naticchioni, 2016). ...
... 7 Human capital externalities and complementarities between skill groups are captured by the human capital of the local industry and the qualification structure of the firm's workforce. As Wheeler (2006) shows that job changes positively impact wage growth, the number of job changes over the last five years is also included. Moreover, we account for the effect of the regional industrial structure on entry wages. ...
This paper investigates whether the density of local labour markets in Germany impacts on the wage of new employment relationships and whether corresponding urbanization economies differ significantly across distinct types of transitions to employment. The results suggest rather small static urbanization benefits. Doubling employment density increases the wage of new employment relationships by 1.0–2.6%. Moreover, benefits seem to accrue only to persons experiencing job-to-job transitions and the short-term unemployed, but not to the long-term unemployed. It is supposed these differences point to matching advantages in large urban labour markets from which only some job seekers benefit.
... In the literature on the causes and effects of agglomeration, explanations of the urban wage premium usually focus on individual productivity of workers in urban environments, assuming that better able workers are indeed better paid. The sources of this higher individual productivity is most often related to basically three different factors: Either: (i) to learning (sharing knowledge), that is, a situation in which human capital accumulation is faster in more population dense larger cities basically due to facilitated social interaction (Glaeser 1999;Glaeser and Maré 2001;Moretti 2004; Baum-Snow and Pavan 2012; De la Roca and Puga 2017); or to (ii) coordination effects, the 'matching hypothesis' which suggests that cities create a context in which there is a better chance of bringing about a good match between workers and firms (Kim 1990;Yankow 2006;Wheeler 2006); or, finally, to (iii) sorting and self-selection, namely, the notion that relatively higher worker productivity in larger cities is largely due to different types of innate abilities of workers living in and moving into these larger cities (see Combes et al. 2008Combes et al. , 2010Matano and Naticchioni 2012) As the number of cited studies suggestsby no means an exhaustive listconsiderable effort has gone into disentangling these effects from one another. Even though there is an emerging consensus that a large share of the urban wage premium can be ascribed to sorting and differences in underlying ability, there are still relatively few studies that empirically address matching and learning (for overviews, see Rosenthal and Strange 2004;Puga 2010). ...
... Larger more expensive cities thereby provide a way of keeping 'low quality individuals out of matches' (Venables 2011, p. 2), and therefore raises the quality of matches, either in project partnerships or employer-employee matches. In line with this, Wheeler (2006) suggest that the development of informational networks in cities with a larger proportion of well-educated and high ability workers has a spillover effect on those with lower levels of education, with the consequence that individual productivity in such cities actually increases more for those with lower education levels. Finally, a related idea is also central in Moretti (2012Moretti ( , 2004 who argues that workers' higher education levels in larger cities affects not only his or her own salary but also the entire community in which he or she resides, by altering the kinds of jobs available in the community. ...
Using matched employer-employee full population data on regional migrants in Sweden, this paper addresses the question whether the urban wage premium, and ‘thick’ labour market matching effects, are to be found across all educational groups, and whether the population threshold for these types of effects varies by educational category. Estimating initial wages, average wage level and wage growth 2001-2009, we find similar wage premiums for all workers in the three largest metropolitan areas, but that there are distinct population thresholds for these type of effects, regardless of educational background. However, job search behaviour as explaining dynamic effects over time seems to pertain mostly to those with higher education.
... In the literature on the causes and effects of agglomeration, explanations of the urban wage premium usually focus on individual productivity of workers in urban environments, assuming that better able workers are indeed better paid. The sources of this higher individual productivity is most often related to basically three different factors: Either: (i) to learning (sharing knowledge), that is, a situation in which human capital accumulation is faster in more population dense larger cities basically due to facilitated social interaction (Glaeser 1999;Glaeser and Maré 2001;Moretti 2004; Baum-Snow and Pavan 2012; De la Roca and Puga 2017); or to (ii) coordination effects, the 'matching hypothesis' which suggests that cities create a context in which there is a better chance of bringing about a good match between workers and firms (Kim 1990;Yankow 2006;Wheeler 2006); or, finally, to (iii) sorting and self-selection, namely, the notion that relatively higher worker productivity in larger cities is largely due to different types of innate abilities of workers living in and moving into these larger cities (see Combes et al. 2008Combes et al. , 2010Matano and Naticchioni 2012) As the number of cited studies suggestsby no means an exhaustive listconsiderable effort has gone into disentangling these effects from one another. Even though there is an emerging consensus that a large share of the urban wage premium can be ascribed to sorting and differences in underlying ability, there are still relatively few studies that empirically address matching and learning (for overviews, see Rosenthal and Strange 2004;Puga 2010). ...
... Larger more expensive cities thereby provide a way of keeping 'low quality individuals out of matches' (Venables 2011, p. 2), and therefore raises the quality of matches, either in project partnerships or employer-employee matches. In line with this, Wheeler (2006) suggest that the development of informational networks in cities with a larger proportion of well-educated and high ability workers has a spillover effect on those with lower levels of education, with the consequence that individual productivity in such cities actually increases more for those with lower education levels. Finally, a related idea is also central in Moretti (2012Moretti ( , 2004 who argues that workers' higher education levels in larger cities affects not only his or her own salary but also the entire community in which he or she resides, by altering the kinds of jobs available in the community. ...
Abstract. Using matched employer-employee full population data on regional migrants in Sweden, this paper addresses the question whether the urban wage premium, and ‘thick’ labor market matching effects, are to be found across all educational groups, and whether the population threshold for these types of effects varies by educational category . Estimating initial wages,average wage level and wage growth 2001-2009, we find similar wage premiums for all workers in the three largest metropolitan areas, but that there are distinct population thresholds for these type of effects, regardless of educational background. However, job search behaviour as explaining dynamic effects over time seems to pertain mostly to those with higher education.
... Moreover, tourism agglomeration is known to create a flexible and vibrant local labor market that facilitates better matching and sorting between the diverse needs of tourism businesses and the heterogeneous skills of hospitality workers . In a frictionless world, this labor pooling can raise the wage rate and reduce labor turnovers, both of which remain topical issues in tourism research (Wheeler, 2006). Meanwhile, tourism agglomeration encourages sharing tacit knowledge about the local tourism market (Weidenfeld et al., 2010). ...
We examine the effect of attraction and destination agglomerations on tourism revenues and tourist flows. Using data from 184 national scenic areas in China for the 2012 to 2017 period as the case study for our two-level agglomeration model, we find that the attraction agglomeration yields cooperative competition at the micro level of tourist districts. This co-existence of compatible and competitive effects determines not only individual national scenic areas’ tourism revenues and tourist flows but also the attractiveness of tourist districts where these national scenic areas are located. At the macro level of tourism destinations, we find that the destination agglomeration only yields a competitive effect, adversely affecting the tourism revenues and tourist flows of individual national scenic areas inside these tourism destinations. Our results suggest that policymakers must consider cooperative competition when managing existing tourist attractions and planning for future ones.
... In addition to this, it further indicates that the rise in energy consumption, owing to the increment in consumption level, service demand, and economic output, exceeds the scale effect of land urbanization. Accordingly, our findings support the suggestion that the Chinese authorities must strengthen the integrated utilization of energy and support information's spillover and technology advancement supported by land urbanization [50][51][52]. Besides this, our results support the suggestion that local government should strengthen land-use management, optimize the structure, reasonably control the intensity, and strive to incline the land-use efficiency [15,32,53]. ...
Changes in land use and the resulting human practices in the land urbanization process would lead to variations in the function, intensity, and efficiency of CO2 emissions and greatly influence urban CO2 emissions. Therefore, using Chinese prefecture-level data for a time period ranging from 2003 to 2017, we systematically examine the mechanism of how land urbanization influences CO2 emissions based on land-use intensity regulation, land-use structure optimization, and land-use efficiency improvements. First, the benchmark results show that land urbanization's influence on urban CO2 emissions is significantly positive. This indicates that the consumption effect caused by land urbanization exceeds the agglomeration effect. Furthermore, the results of the nonlinear analysis using the spatial adaptive semi-parametric and semi-parametric spatial dynamic panel models show that the association between land urbanization and carbon emissions demonstrates an inverted U-shaped curve. Simultaneously, land urbanization represents a dynamic cumulative and spatial spillover effect on urban CO2 emissions. Second, a mechanism analysis reveals that effective land urbanization can promote CO2 emission reductions through efficiency improvement, structure optimization and proper control of the land-use intensity. Additionally, we analyze heterogeneity in regional differences. In the line with study findings, the central government in China should promote the optimization of territorial spatial governance, optimize energy consumption structures, make comprehensive use of its funds, tax policies, industrial development support, and market-oriented mechanisms, and further optimize the layout of urban space.
... Another strand of agglomeration literature has considered specifically dynamic effects of agglomeration, which are generally thought to operate through learning and human capital accumulation mechanisms. One advantage of dense areas is that they enhance the accumulation of human capital and facilitate technological spillovers, experimentation and learning (Glaeser and Maré, 2001;Wheeler, 2006;D'Costa and Overman, 2014;De la Roca and Puga, 2017). Section 1.6 of this paper draws on this literature, in particular it follows the methodology of De la Roca and Puga (2017), to explore the dynamic effects on wages related to local human capital externalities. ...
This thesis examines the geographical inequalities in wages and social promotion across French employment zones. It focuses on the concentration of higher-educated people as a major cause of agglomeration economies in local labor markets. The first chapter reconsiders the matter of density and human capital in the case of French local labor markets over the recent period 2009-2015. It has three main contributions. The first contribution is to provide a new exploration of the role of local human capital in agglomeration gains in France with respect to the role of pure density. Using a panel of individual administrative data and taking into account potential sorting bias, it shows that agglomeration gains in French local labor markets are much more linked to human capital externalities than pure local density effects. The second contribution is to explore the dynamic effects related to local human capital externalities. It finds that there are substantial learning advantages in zones where the human capital is abundant, which leads to a substantial medium-term wage premium. Finally, a third contribution of this paper is to investigate the role of local human capital externalities according to whether they come from private or public higher-educated workers. It finds that geographic wage inequalities appear to stem more from differences in human capital in the private sector than in the public sector. This is probably more a consequence of public policies aimed at distributing public employment equitably across territories, rather than the "proof" that higher educated workers in the public sector do not generate human capital externalities. The second chapter examines the influence of local labor markets on individuals' social mobility during their working life. In France, over a period of six years, individuals working in big or dense areas and areas with abundant human capital are more likely to be promoted to a higher socioprofessional status – a promotion associated with a substantial wage increase and/or better working conditions. Applying an empirical strategy to remove spatial sorting bias in a sample of about 350,000 workers in metropolitan France over the period 2009-2015, it finds that density, local human capital, and labor market size significantly increase the likelihood of being promoted, but have no impact on demotions. Again, the results suggest that the agglomeration effects on upward mobility come primarily from human capital externalities (and proximity to other dense markets), rather than pure urbanization and scaled effects. In addition, it shows that local density increases both internal (within the same firm) and external (in another firm) promotions, with the impact of density being even larger on external promotion. Finally, experience accumulated in the densest areas is portable, and increases the chances of promotion after relocation to less dense areas. The third chapter measures the effects on human-capital accumulation at the local level of the "new universities" created as part of the U2000 Plan implemented in France in the early 1990s. Established in 1990, this national program resulted in the creation of eight universities (spread over 15 sites), including four outside the Paris region (over 10 sites). Using the synthetic control method, it shows that the opening of "new universities" has led to a significant increase in the local share of higher-educated people (not including those in school). On average, the creation of "new universities" increased this share by 4 p.p. within 25 years (about 17% of the counterfactual situation), though the effect differs across cases. Moreover, exploring the employment implications of "new universities" creation, it finds credible evidence that, on average, human-capital gains co-occurred with gains in skilled jobs.
... Este crescimento acelerado está mais associado às mudanças nas ocupações do que os incrementos salariais em uma ocupação particular. Com base nos resultados estimados, alguns autores concluíram que haveria uma complementaridade entre a qualidade de firmas e os trabalhadores, e o match entre eles seria adequado em áreas urbanas mais densas (COMBES et al., 2008;ANDERSSON et al., 2007;YANKOW, 2006;WHEELER, 2006). Em uma escala regional é possível compilar os modelos de cidade em: ...
Intentou-se provocar uma discussão a respeito de economia das cidades, inicialmente buscando discussões teóricas nos conceitos dos índices de qualidade de vida construído a partir de três abordagens, Hedônica, de Kahn e dos modelos de escolha discreta. Verificou-se um trade off entre as oportunidades econômicas e as amenidades locais que condicionam a decisão migratória. Existem diferenciais como o reflexo de fenômeno nominal em que o elevado custo de vida nas grandes cidades seria compensado com trabalhadores mais qualificados ou habilidosos se comparados aos de cidades menores. É assumido que os fatores de produção, capital e trabalho, são considerados nos casos de aglomeração espacial e suas economias. Posteriormente, fez-se a análise dessa aglomeração, e suas economias, para verificar a sustentabilidade, nesse caso foram dissecadas as ideias pertinentes aos estilos mais comuns de aglomeração, por fim discutiu-se as abordagens para o desenvolvimento urbano.
... Particularly of interest for our work here is the observation that the high-skilled migration literature suggests that increased disparities between rural and urban labour markets may be attributed to pre-and post-college moves by students and alumni (Faggian et al., 2017;Yankow, 2006). College students frequently move to urban areas after graduating to take advantage of the urban wage premium, further exacerbating rural and urban disparities (Glaeser & Maré, 2001;Wheeler, 2006). There is an open question about whether migration across regions from rural to urban settings may lead some students and alumni entrepreneurs to be more or less successful than others. ...
How does the migration of university graduates from rural to urban areas impact entrepreneurial performance? We propose that rural-to-urban migrants found larger firms than urban entrepreneurs because migrants are less risk averse, and the migration process further reduces risk aversion. Also, we propose that rural-to-urban migrants found larger firms than rural entrepreneurs because urban areas provide better entrepreneurial opportunities and resources to create larger firms. To test our hypotheses empirically, we conducted an alumni survey and analysed 283 entrepreneurs who were admitted from various locations in China to Tsinghua University in Beijing, and then went to rural areas or urban areas upon graduation. We find that alumni entrepreneurs who migrated from rural to urban areas are more likely to found firms in the top quantile of firm size. This study provides implications for designing regional policies that facilitate labour mobility from rural to urban areas.
... For the Netherlands, Mulder and van Ham (2005) found that having spent time in the major urban areas was positively related to men's (but not women's) occupational achievement later in life. For the United States, Wheeler (2006) demonstrated that men's wage growth was greater in metropolitan than other areas; and for Sweden, found higher wage premiums from moves up the regional hierarchy. ...
Young adult internal migration forms a large share of the influx of people into large cities in the developed world. We investigate the role of the residential locations of siblings for young adults’ migration to large cities, using the case of Sweden and its four largest cities: Stockholm, Gothenburg, Malmö/Lund, and Uppsala. We use register data for the full Swedish-born population of young adults aged 18–28 living in Sweden in the years 2007–2013 and multinomial logistic regression analyses of migrating to each of the four cities or migrating elsewhere versus not migrating. Our point of departure is the paving-the-way hypothesis, which posits that young adults who have a sibling living at a migration destination are particularly likely to move to that destination, more so than to other destinations. Additional hypotheses are related to having more than one sibling in the city and to the gender of siblings living at the destination. We find support for the paving-the-way hypothesis and an additional effect for having more than one sibling in the city. Having a sibling of the same gender in a city matters more for moving there than having a sibling of the opposite gender.
... Another possible approach is to include agglomerations economies in the analysis. There is growing literature that finds that agglomeration economies lead to an urban wage premium; for example, Glaeser and Mare (2001), Wheeler (2006), Yankow (2006), Fu (2007), and Melo and Graham (2009) find a positive relationship between wage growth and labor market size. Others find that an increase in the concentration of employment in a worker's own industry increases wages (Wheaton & Lewis 2002). ...
Economists have devoted much attention to understanding the effects of state–local fiscal policies, particularly taxes, on the growth of state-level employment. However, no one has investigated whether the effects differ by wage level. Using a state-level panel data set, the authors investigate the link between state–local taxes and the growth of employment for three wage-level categories. The authors find relatively consistent evidence supporting the proposition that the response of employment growth to changes in taxes differs by wage level.
... Third, the proximity of people and increased potential for face-to-face interaction promotes learning [23][24][25]. Despite the rise of technologies that allow communication at a distance, such as the telephone and the Internet, research shows that some kinds of "sticky" knowledge is best transmitted through direct interactions [26]. ...
By 2050, there are forecast to be 2.4 billion more people in cities, and this century could rightly be called the urban century. This paper argues that, paradoxically, without the use of nature the urban century will fail. We review three literatures to assess the scientific support for this proposition. First, studies from economics show that it is the extreme potential for interaction that makes cities centers of productivity, innovation, and creativity. Second, many health studies document the increase in stress and greater prevalence of some mental disorders in cities, and we argue that it is the constant interaction of urban life that leads to this urban psychological penalty. Here we show that 46% of humans are living at population densities where global datasets suggest that this psychological penalty may be an issue, a fraction that will only grow as urbanization continues. Third, ecosystem service research shows that even a brief interaction with nature has mental health benefits, alleviating symptoms of this psychological penalty. Global datasets suggest that currently, only 13% of urban dwellers may be living in close enough proximity to nature to experience its mental health benefits. We argue that natural features in cities will be an essential part of the urban century, a way to have all the benefits of our urban, connected world yet also have that urban home be a place where we can psychologically flourish. We discuss two specific ways governments are trying to integrate nature into citizens’ lives, through Green Prescriptions and the Biophilic Cities Network.
... A subset of the high-skilled migration literature suggests that pre-and post-college moves by students may contribute to increased disparities between rural and urban labour markets. Some studies show that college students move to urban areas following graduation to take advantage of an urban wage premium (Glaeser & Maré, 2001;Wheeler, 2006;Yankow, 2006), implying that the moves of this group could further augment the disparities between rural and urban regions. Ahlin et al. (2016) provide evidence from Swedish regions that the likelihood of sorting into urban regions to attend college and following college graduation increases with student skill level. ...
... Yet, the significance of agglomeration is partially derived from the quality and diversity of the local labour market. Heterogeneous skills and requirements within a labour market pool can also enable greater sorting, which consequently drives higher productivity and wage levels (Andini et al., 2012;Wheeler, 2006). However, increased wages and costs related to an increase in labour pooling within a cluster can have negative effects on tourism productivity (Yang, 2016). ...
This research investigates the direct and (indirect) spatial spillover effects of agglomeration economies on the productivity of the tourism industry. With increasing concerns about the persistence of low (labour) productivity in tourism across many developed economies, there is an urgent need to address this productivity challenge. Using major under-exploited UK microeconomic panel data, spatial econometric modelling is employed to estimate the effects of agglomeration economies on productivity. Findings reveal the significant effects of agglomeration economies on productivity within a specific region, but also significant spatial spillover effects across neighbouring regions, suggesting the possibility of productivity convergences. Competitive and complementary effects of agglomeration economies on productivity are identified.
... Likewise, the authors who have investigated whether the matching between workers and firms is more productive in the large and dense areas are Wheeler [52] and Anderson et al. [53] for the US; Figueiredo et al. [54] for Portugal, and Andini et al. [55] from Italy. Complementarily, among the jobs that lead the specialization of tasks as a source of urban agglomeration economies are Duranton and Jayet [56] and Kok [57], for France and Germany, respectively. ...
This investigation seeks to explore the importance of agglomeration mechanisms in the location decisions of new manufacturing firms in Ecuador, based on sector and canton level data for the 2000–2010 period. A model is proposed to explore the relative importance of agglomeration mechanisms in location decisions of new manufacturing companies, a regression is performed using instrumental variables, the econometric estimation is developed, and an identification strategy is proposed. The results of the empirical analysis show that the learning mechanism, and history, have a positive and significant impact on the creation of new firms. An increase of 1% in the transfer of knowledge in the industries and cantons of the country is correlated with the increase in the location of new firms in the order of 9.2%. In turn, history has a positive and significant effect on the creation of new firms, in industries and cantons characterized by a past industrial environment. Even when the learning mechanism and history are controlled by provinces, sectors, and cantons, they continue to be the most important determinants of the location of new firms. This evidence could be attributed to the public investment in Ecuadorian industry in recent years. In this sense, the contribution of this work is found in the empirical distinction of the mechanism that favors or inhibits the location decisions of new companies. The analysis was replicated for a three-digit sectorial disaggregation level, to verify whether the agglomeration mechanisms operate differently on a different industrial scale. The results suggested that there were no differences to be considered. When the analysis was done excluding the cantons of Quito, Guayaquil, and Cuenca, given their high representation in terms of the birth of industries and employment, the results were consistent with those previously mentioned. However, it is so only with respect to history, which in this case accounts for 38.8% of the birth of firms; whereas, matching accounts for an order of 38.9% in the period of analysis. This result is explained in the context of the country’s industrial policy.
... Young people in urban Africa spend long periods of time in unemployment or underemployment while looking for good jobs. Dense labour markets in cities should reduce the time taken for workers to find good matches (Puga, 2010;Wheeler, 2006), but these benefits can be mitigated by high transport * ...
Do high search costs affect the labour market outcomes of job seekers living far away from jobs? I randomly assign transport subsidies to unemployed youth in urban Ethiopia. Treated respondents increase job search intensity, and are more likely to find good, permanent, jobs. Subsidies also induce a short-term reduction in temporary work. I use a high-frequency phone call survey to track the trajectory of search behaviour over time to show that the subsidies significantly increased job search intensity, and the use of formal search methods. The evidence suggests that cash constraints cause young people to give up looking for good jobs too early. This article is protected by copyright. All rights reserved.
... While it is now widely recognized that urbanization is a determinant of average labor productivity, and thus of average wages, its impact on the components of earnings is less frequently investigated (and, to our knowledge, it has never been on Italian data). 4 Although there are a few studies on the differentials in returns to education generated by urban agglomeration, there is much less evidence on the differentials in returns to experience and we have not found any work specifically addressing returns to tenure (except for Wheeler (2006) who shows that urban wage gains are due to more frequent job changes in large cities rather than to return-to-tenure differentials). In this paper we find, somewhat surprisingly, that in the largest labor markets a higher share of workers complete a university degree, even though college graduates earn 0.4-0.5 percent less there than elsewhere (see Section 4.2 for possible explanations of this apparent puzzle). ...
We analyze empirically the impact of urban agglomeration on Italian wages. Using microdata from the Bank of Italy\'s Survey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employees distributed in 242 randomly drawn local labor markets, we test whether the structure of wages varies with urban scale. We find that every additional 100,000 inhabitants in the local labor market raises earnings by 0.1 percent. The use of a geographical approach enables us to state that this effect decays very rapidly with distance, losing significance beyond approximately 12 kilometers. We also find that urbanization does not affect returns to experience and that it reduces returns to education and to tenure with current firm, while providing a premium to worker supervisors and office workers.
... Combes et al. (2008) findings suggest that the differences in wages across regions may not be only the consequence of compensations for amenities and cost-of-living but might be endogenous, wages in some areas are higher because workers who have better labour market characteristics agglomerate themselves in denser and more skilled regions. Explanations for such effects were already paved by Alfred Marshall in 1890 " the most enterprising, the most highly gifted, those with the highest physique and strongest character go [(Glaeser and Maré, 2001; Wheeler, 2006) is that workers may learn more in larger cities, thus more skilled workers are attracted by this. However, once one has controlled for workers and industry (observed and unobserved) characteristics the then standardised wage differentials should be the consequences of compensations for disparities in amenities and cost-of-living. ...
In the literature there is some evidence that the competitiveness of pay of a specific public sector group of staff has an impact on the delivery of public services. This thesis extends this literature by analysing cross correlations of the local variations in the shortage of assistant nurses and registered nurses in public hospitals. It also investigates how hospitals may adapt to shortage of staff by changing their staff mix. The thesis analysed the situation for two countries England and France. Measure of the competitiveness of pay was computed by estimating Standardised Spatial Wage Differentials for nursing staff in public hospitals and for comparator groups. Comparator groups are defined as workers within the same major Social Occupational Code in the private sector. In France public hospitals compete for staff with private not for profit and private for profit hospitals. These provide direct comparator groups. Differences between SSWDs for nursing staff and comparator groups give a set of wage gaps which are the measure of the competitiveness of pay.
This thesis shows that there are cross correlations of labour markets, the competitiveness of pay for registered nurses in England is associated to both the shortage of assistant nurses and registered nurses. Its effect also depends on values of the competitiveness of pay of assistant nurses. Where the pay for registered nurses is more competitive the shortage of registered nurses is lower. This results holds only where the pay for assistant nurses is more competitive than the national average. Hospital trusts in England performing different type of care have different abilities in adapting to shortage of staff. Specialist trusts can substitutes one group of staff for the other depending on the relative competitiveness of pay of the two nursing groups. For France, the competitiveness of pay of assistant nurses has an impact on the shortage of assistant nurses in public hospitals. Where the pay for assistant nurses is more competitive the shortage of assistant nurses is lower. Public hospitals in France compete for staff with private hospitals which have different collective agreements. Private hospitals matter for the shortage of staff in public hospitals yet pay in private hospitals plays a minor role. Non monetary characteristics of private hospitals have larger impacts than pay.
The large labor markets of big cities offer greater possibilities for workers to gain skills and experience through successively better employment opportunities. This “experience effect” contributes to the higher average wages that are found in big cities compared to the economy as a whole. Racial wage inequality is also higher in bigger cities than in the economy on average. We offer an explanation for this pattern, demonstrating that there is substantial racial inequality in the economic returns to work experience acquired in big cities. Using data from the National Longitudinal Survey of Youth, 1979 we find that each year of work experience in a big city increases Black and Latinx workers’ wages by about one quarter to half as much as White workers’ wages. A substantial amount of this inequality can be explained by further racial disparities in the benefits of high-skill work experience. This research identifies a heretofore unknown source of inequality that is distinctly urban in nature, and expands our knowledge of the challenges to reaching interracial wage equality.
This paper shows that there is superlinear scaling of vacancies with employment size. That is, there are disproportionally more vacancies relative to employment in urban areas, not just for overall employment, but also for occupational and educational classes. Hence vacancies are more strongly concentrated than the jobs to which they refer. Moreover, we find that, compared to all employment, the concentration of labour demand increases with required skill levels. We show that the stronger growth of jobs in cities is unable to explain this finding and propose an alternative explanation based on vacancy chains in spatially related labour markets. The results suggest that on-the-job searchers have better possibilities in cities to improve their position. This helps explain the higher mobility of especially younger workers in cities and the superior quality of job-worker matches in large labour markets.
The extensive high-speed rail (HSR) network in China has significantly enhanced regional population mobility, yet its impact on the well-being of migrant workers remains underexplored. Utilizing data from the China Migrant Dynamic Survey (CMDS) from 2014 to 2018, this study investigates the influence of HSR on wage premiums for migrant workers and identifies the factors driving these premiums using the non-parametric nearest neighbor matching method. The findings reveal that HSR confers a significant wage premium of 13.1% for migrant workers in cities with HSR infrastructure compared to cities without it. This wage premium effect is particularly pronounced in less developed western China and in cities with larger populations and a higher proportion of tertiary sector economy. The study finds a 10.54% increase in wage premiums for intra-province migrant workers due to HSR, while the effect remains negligible for inter-province migrant workers. Moreover, the wage premium effect is stronger for higher-skilled labor and for migrant workers aged 16 to 45. It is particularly significant for professionals, administrative staff, and workers in the service industry. The HSR wage premium effect is multifaceted, exhibiting both level and growth effects, with the latter intensifying over time after HSR introduction. Overall, the findings suggest that HSR deployment positively influences migrant worker wages by enhancing travel convenience, improving market access, fostering knowledge spillovers, and facilitating industry transfers. However, these impacts vary by location, skill level, and industry.
Prior scholarship has documented and tried to explain growing inequalities in individual wealth holdings—especially between homeowners and renters—but has not considered the role of residential position in the rural-urban hierarchy. We estimate fixed-effect models of one’s rank in national net, housing and financial wealth distributions during the 2010–2018 period, based on Norwegian register data on prime-age individuals. We find dramatic geographic differences in trajectories of wealth accumulation that are strongly conditioned by tenure. Residing longer in a more urbanized area—especially in the central Oslo region—results in a substantially higher net wealth position only for homeowners. This result is driven overwhelmingly by their greatly superior gains in housing wealth over the period. By contrast, the net wealth and financial wealth positions for those who always rent are virtually indistinguishable across the hierarchy, regardless of duration of residence. Our evidence suggests that the positive correlation between earnings and rent levels across the rural-urban hierarchy yields this result.
Social scientists and policymakers alike have become increasingly concerned with understanding the nature, causes, and consequences of inter-regional inequality in economic living conditions. Contemporary spatial inequality is multi-faceted—it varies depending on how we define inequality, the scale at which it is measured, and which groups in the labor force are considered. Increasing economic inequality has important implications for broader social and political issues. Notably, it is difficult to account for the rise of far-right populism in industrialized countries without considering the context of growing inter-regional inequality. Important explanations for the rise in inter-regional inequality include changing patterns of worker and firm sorting processes across space, major transitions like the reorientation of the economy from manufacturing to digital technologies, and increasing global economic integration, as well as policy. Different causal explanations in turn imply a different role for place-based policy. This article introduces the context of the special issue on the nature, causes, and consequences of inter-regional inequality, focusing specifically on inequality in North America and Western Europe, and aims to identify challenges for, and spark further research on, inter-regional inequality.
We re‐examine the respective role of local density and local concentration of human capital in the agglomeration gains for about 750,00 individuals working in 304 commuting zones of metropolitan France over the period 2009–2015. Agglomeration gains are mostly driven by human capital effects over this period. Also, because it absorbs dynamic learning effects, the use of worker fixed effects to address spatial sorting of individuals may underestimate, by about two third, the wage premium with respect to local concentration of human capital over a midterm period. Finally, wage gaps stem more from differences in human capital in the private sector than in the public sector. We do not find evidence of a multiplier effect of public employment on local human capital externalities in the private sector.
How policymakers and academics organize and visualize core ideas affects how they define and perceive problems and generate policy solutions. While understanding complex ideas—such as productivity—as the product of a set of discrete inputs can help target inquiry and structure policy interventions, this can also lead to siloed thinking that neglects dynamic effects and interactions between elements. This paper explores how three organizations conceptualize the ‘productivity puzzle’ and suggests that they might be oversimplifying the roots of productivity. We present a systematic review of labour productivity literature using bibliometric coupling and network analysis to develop an alternative framework and map of themes and gaps. This work encourages policy to (1) adopt a systems lens and perceive productivity as the product of dynamic interactions and (2) think critically about how to structure future research on productivity.
The large and persistent wage gap between the Bangkok Metropolitan Region and its peripheries remains a major concern for policymakers and civil society. Theoretically, these regional disparities exist due to differences in workforce skills and the local characteristics of the regions. This study empirically investigates the sources of spatial wage disparity in Thailand using data sets from the Labor Force Survey, the Industrial Census, geospatial data, and satellite imagery for the years 2007, 2012, and 2017. The two-stage estimation method was applied, and the soil clay content was used as the instrumental variable for correcting endogeneity and variable bias omission. The results show that workers’ education and experience affect the wage differential. Other than individual skills, workers also benefited from the agglomeration externalities of large cities. Specifically, the effect of agglomeration externalities on wages in Thailand was found to be statistically significant. To overcome the paradox of a low urbanization rate and high urban primacy in Thailand, this study suggests the establishment of multiple regional cities that create high agglomeration externalities.
This study examines the relationship between agglomeration and labour market matching by investigating the small‐scale socio‐spatial determinants of a network created by the within‐region mobility of employees across organisations. The local labour flow network is constructed on the basis of an establishment‐level matched employer‐employee database covering selected knowledge‐intensive industries in the Helsinki‐Uusimaa Region in Finland during the period 2001–2015. The results from the analysis of various tie formation processes reveal that the formation of a link by inter‐organisational employee mobility within an integrated labour market area is more likely between organisations geographically closer to each other, all else being equal. The findings highlight the importance of local density for the job search process. This article is protected by copyright. All rights reserved.
We offer causal evidence of higher returns to experience in big cities. Exploiting a natural experiment that settled refugees across labor markets in Denmark between 1986 and 1998, we find that refugees initially earned similar wages across locations. However, those placed in Copenhagen exhibited 35% faster wage growth with each additional year of experience. Faster sorting of workers toward the type of establishments, occupations, and industries typically found in cities accounts for the vast majority of this urban wage-growth premium.
Using administrative data for West Germany, we study the relative importance of portable and non-portable agglomeration effects for the urban wage premium. In doing so, we advance the established strategy of estimating wage-tenure profiles for urban-rural and rural-urban movers by adding worker, firm, and match fixed effects. This allows us to distinguish unambiguously between both types of agglomeration effects. Our results show that portable and non-portable agglomeration effects equally contribute to the urban wage premium. Moreover, portable agglomeration effects are not only observed in the biggest cities. Instead, the speed of human capital accumulation continuously increases with city size.
This article investigates the dynamics of the spatial wage premium for workers employed on temporary and permanent contracts. We use an employer-employee database that covers the universe of young Italian employees for 2005-2016. On controlling for individual observed and unobserved heterogeneity and endogeneity of the relationship, our findings indicate that workers hired on a temporary basis do not enjoy the same benefits from agglomeration externalities as workers on permanent contracts. Nonetheless, the likelihood of a temporary worker switching to a permanent contract, as well as its wage premium, increases with city size, thus partially offsetting the spatial dynamics disadvantage.
This article is protected by copyright. All rights reserved.
This paper explores the relationship between routine-biased technological change and agglomeration economies. Using administrative data from the Netherlands, we first show that in dense areas, jobs are less routine-task intensive (i.e. less repetitive and automatable), meaning that jobs cover a larger spectrum of tasks. We then explore how the routine intensity of jobs affects the urban wage premium. We find that the urban wage premium is higher for workers performing non-routine tasks, particularly analytic tasks, while it is absent for workers in routine task intensive jobs. These findings also hold within skill groups and suggest that routinisation increases spatial wage inequality within urban areas. We further provide suggestive evidence that a better matching of skills to jobs and increased learning opportunities in cities can explain these findings.
The impacts of urbanization on carbon emissions have attracted widespread attention for a long time. Quantitative research on the impacts is of great significance for formulating carbon reduction policy. Based on the dynamic panel autoregressive distribution lag (ARDL) model, we systematically study the general and heterogeneous long-run equilibrium relationships, short-run dynamic relationships, impact mechanism and lag effect between urbanization and three carbon emission dimensions in OECD high-income countries during long period. The main empirical results indicate that developed countries tend to have the same negative impacts of urbanization on carbon emissions, although there are differences in the endowments of different countries. The impact is relatively weak, for each percentage point increase in urbanization rate, CO2 emissions per capita decrease by 0.015%, total CO2 emissions decrease by 0.012%, and CO2 emission intensity decrease by 0.009%. All member countries have achieved the decoupling of urbanization and carbon emissions. Urbanization affects carbon emissions by affecting economic growth, energy efficiency, and final energy consumption structure. This paper further reveals the multi-level impacts of urbanization on carbon emissions and provides policy implications of achieving carbon reduction through urbanization's agglomeration effect for government decision makers.
Cities are our greatest invention, an arrangement of homes and businesses that drastically increases the speed of interaction. This interaction then leads to numerous benefits, which is the primary subject of this chapter. We discuss first agglomeration economics—the benefits to firms and people productivity of being in clusters (agglomerations). Our discussion follows the traditional classification of benefits into sharing, matching, and learning. Then, we discuss research that shows that proximity also increases the possibilities for consumption, with a brief case study of restaurant variety in rural and urban areas. Finally, the chapter ends by arguing that the demographic forecasts are clear, urbanization is coming, and humanity therefore must turn its focus to the crucial question of what kind of urban world we want to live in.
Zusammenfassung In Deutschland beeinflussen regionale Disparitäten besonders auch zwischen Ost- und Westdeutschland individuelle Lebens- und Einkommenschancen. Individuen können versuchen, ihre Arbeitsbedingungen – etwa ihr Einkommen – durch räumliche Mobilität zu verbessern. Der vorliegende Beitrag untersucht Mobilität zwischen Ost-, Nord- und Süddeutschland und damit einhergehende Einkommensveränderungen. Basis ist ein Linked Employer-Employee Datensatz, der um regionale Strukturindikatoren ergänzt wurde. Die Ergebnisse zeigen: Jüngere und Hochqualifizierte wechseln häufiger und realisieren bei Betriebswechseln mit höherer Wahrscheinlichkeit Einkommenszuwächse. Anreize für Ost-Westmobilität bestehen fort, da bei Wechseln aus Ostdeutschland in Richtung Nord- oder Süddeutschland preisniveaubereinigt die Wahrscheinlichkeit von Einkommenszuwächsen höher ist als bei Wechseln innerhalb Ostdeutschlands. Wechsel nach Ostdeutschland können mit Einkommensverlusten, aber auch Einkommenszuwächsen einhergehen. Abstract: Workplace-mobility Between East, North and South Germany. Success Factors of Income Increases In Germany, regional disparities especially between East and West Germany influence individual life and income opportunities. Individuals can try to improve their working conditions – for example their income – through spatial mobility. The present article examines job moves between East, North, and South Germany and the related income perspectives. The data basis is a Linked Employer-Employee data set which has been supplemented with regional structural indicators. The results of the analyses show: Younger and highly qualified employees change more frequently and are more likely to increase their income when they change companies. Incentives for East-West mobility persist, because for trajectories from East to North or South Germany, adjusted for regional price level, a comparatively higher probability of income success can be determined. Transitions to East Germany can be associated with a loss of income but also a gain of income.
This paper investigates the role that spatial mobility plays for early‐career labor market outcomes across education programs and qualification levels. We use data for the full population of Danish graduates from upper (post‐)secondary and tertiary education programs to estimate the labor market returns from migrating after graduation. Benchmark OLS estimates find positive correlations between migration, the employment probability, and entry wages. We further apply IV estimation with instruments constructed from exogenous push factors into migration at the individual, education institution, and local labor market level. Results confirm a mobility premium for graduates from tertiary but not from vocational education programs.
Micro-price data collected from Germany's consumer price index are used to compile a highly disaggregated regional price index for the 402 counties and cities of Germany. A multistage version of the weighted country-product-dummy (CPD) method is introduced. The unique quality of the price data allows one to depart from previous spatial price comparisons and to compare only exactly identical products. It is found that the price levels are spatially autocorrelated and largely driven by the cost of housing. The price level in the most expensive region is about 27% higher than in the cheapest region.
To what extent do regional characteristics influence employment trajectories? Do regional factors diversely affect the employment careers of different sociodemographic groups? By investigating these questions, we extend current life course research in two ways: First, from a conceptual perspective, we use approaches from regional economics in addition to established sociological labour market theories to gain insights into the effects of regional determinants on individual labour market outcomes. Second, from a methodological point of view, we conduct event history analyses based on a German dataset that contains information on individuals, firms and regions. Our results show that there are considerable regional heterogeneities regarding population density and the amount of human capital endowment, both of which influence working careers differently. Regional agglomeration predominantly offers opportunities in terms of employment trajectories, while regional human capital accumulation increases employment risks. Additionally, our findings indicate that group-specific inequalities with respect to employment careers can be weakened or even strengthened by regional frame conditions. Female and foreign employees benefit most from denser regions and from a higher human capital endowment. By contrast, the unemployment risks of workers who previously experienced unemployment periods during their working lives are increased by both of these regional characteristics. Findings regarding education level are mixed: Workers with occupational qualifications profit from regional agglomeration to a greater extent than do low or even generally qualified workers. However, a high local human capital endowment leads to skill segregation between vocationally trained and highly qualified employees.
Cities are characterised as places of increased human capital accumulation, dynamic labour markets and faster wage growth: in short, places where workers can get ahead. Studies suggest that urban workers can benefit from faster learning and from better job matching. This article assesses the extent to which cities act as escalators for workers in low-wage jobs using panel data from Great Britain covering the period 2009–2014. When defining low pay using a standard national wage threshold, workers in London, the largest city, are significantly more likely to make a transition from low- to higher-paid employment than workers in non-urban areas. However, the use of a national wage threshold to measure progression from low pay is sensitive to geographic variations in wage levels. When using an alternative, occupation-based definition of low pay there is little to no evidence of faster wage growth in London or other large British cities, suggesting that low-paid workers do not benefit significantly from faster learning or more efficient job matching in cities. The findings, once adjusted for differences in the wage distribution, fail to identify an urban escalator effect for those in low-paid employment, suggesting that there is a fairly consistent set of underlying factors shaping progression from low pay across geographies.
The sorting of high-ability workers is often advanced as one source of spatial disparities in economic outcomes. There are still few papers that analyze when human capital sorting occurs and whom it involves. Using data on 16 cohorts of university graduates in Sweden, we demonstrate significant sorting to urban regions on high school grades and education levels of parents, i.e., two attributes typically associated with latent abilities that are valued in the labor market. A large part of this sorting has already occurred in deciding where to study, because the top universities in Sweden are predominantly located in urban regions. The largest part of directed sorting on ability indicators occurs in the decision of where to study. Even after controlling for sorting prior to labor market entry, the “best and brightest” are still more likely to start working in urban regions. However, this effect appears to be driven by Sweden's main metropolitan region, Stockholm. We find no influence of our ability indicators on the probability of starting to work in urban regions after graduation when Stockholm is excluded. Studies of human capital sorting need to account for selection processes to and from universities, because neglecting mobility prior to labor market entry is likely to lead to an underestimation of the extent of the sorting to urban regions.
We integrate into a unified framework the spatial and the employment dimensions of worker mobility, tracing workers across firms, across establishments, and across regions. Drawing upon the spatial dimension of internal labor markets in firms with multiple establishments in multiple locations, our results indicate that the contemporaneous wage premium to migration is around 3 percentage points. For the case of job switchers, we find that the return to regional migration is due to access to better jobs at the destination. We also document the existence of an urban premium for same-employer migrants but for employer changes this premium is driven by selection.
The purpose of this paper is to formally evaluate whether odds of entry into self-employment decrease as skin tone darkens for Blacks in the United States. Extending past work on inter-group differences in Black-White self-employment, based on data from National Longitudinal Survey of Youth 1997, with darker skin tone the odds of self-employment decline. Having spent more time in labor force further decreases the likelihood of self-employment for darker skin tone Blacks, and being a high-school graduate, scoring high on Armed Services Vocational Aptitude Battery (ASVAB), or higher past year income are not associated with self-employment of darker skin tone Blacks. While darker skin tone Blacks who are self-employed derive lower income, those who are self-employed and with more human capital (longer time spent in the labor force, scoring high on ASVAB or being a high school graduate) have a higher income.
In recent decades, knowledge spillovers have taken the helm as the driving force of growth in cities. The ease of communicating ideas and the sheer density of large urban areas have made this a plausible explanation for continued growth of employment and population in cities. However, there is little consensus on the nature of the optimal conditions for stimulating knowledge spillovers. This paper identifies these optimal conditions by exploring the relative importance of industry specialization, diversity and competition across all industries and all metropolitan areas from 1970 to 2011 in the U.S. Long-term employment growth in cities is found to be driven by industry diversity combined with a high level of competition. This combination fosters the greatest amount of cross-industry fertilization of ideas and knowledge spillovers.
In this paper, we develop an econometric model to estimate the impacts of Electronic Vehicle Management Systems (EVMS) on the load factor (LF) of heavy trucks using data at the operational level. This technology is supposed to improve capacity utilization by reducing coordination costs between demand and supply. The model is estimated on a subsample of the 1999 National Roadside Survey, covering heavy trucks travelling in the province of Quebec. The LF is explained as a function of truck, trip and carrier characteristics. We show that the use of EVMS results in a 16 percentage points increase of LF on backhaul trips. However, we also find that the LF of equipped trucks is reduced by about 7.6 percentage points on fronthaul movements. This last effect could be explained by a rebound effect: higher expected LF on the returns lead carriers to accept shipments with lower fronthaul LF. Overall, we find that this technology has increased the tonne-kilometers transported of equipped trucks by 6.3% and their fuel efficiency by 5%.
The authors exploit administrative data combining workers' earnings histories with information about their firms to estimate the magnitude and temporal pattern of displaced workers' earnings losses. They find that high-tenure workers separating from distressed firms suffer long-term losses averaging 25 percent per year. In addition, the authors find that displaced workers' losses (1) begin mounting before their separations; (2) depend only slightly on their age and sex; (3) depend more on local labor-market conditions and their former industries; (4) are not, however, limited to those in a few sectors; and (5) are large even for those who find new jobs in similar firms. Copyright 1993 by American Economic Association.
If economic growth relies upon the extent-of-the-market, then openness will decrease the connection between initial income and later growth. Alternatively, learning-by-doing models suggest that wealth will be more positively correlated with growth in open economies, because trade causes advanced economies to specialize in products with more opportunities for learning. We examine twentieth century less developed countries and nineteenth century U. S. states. In both data sets, there is a much stronger correlation between growth and initial wealth among closed economies. These findings support the importance of the extent-of-the-market, and aggregate demand in fostering growth.
Consisting of a set of closely related studies of urban spatial structure, this monograph focuses on the decentralization of metropolitan areas. Foremost is the belief that decentralization, or suburbanization, lies at the root of most of the social problems that plague urban areas. Therefore, an understanding of the process is basic to policies and programs for mitigating such ills. Professor Mills thus presents an empirical study of the patterns and causes of suburbanization of population and employment from the 1880's to the 1960's. He then constructs theoretical models to analyze the relation between the locations of employment and residence in urban areas as well as the reasons for the increasing move to the suburbs. Special attention is paid to congestion as a cause and effect of the trend towards suburbanization. After considering an idealized model with an economically efficient transportation system, he concludes that a policy of efficient investment and pricing in urban transportation might have a significant effect on the pattern of urban residential density. Finally, a discussion is presented of the ways in which the models could be modified and extended for use in public policy analysis. (BL)
We propose a monopolistic competition approach to the study of city sizes, and we compare it with the traditional approach based on external economies. It has been frequently noted in the literature that one of the major causes of industrial agglomeration is the availability of specialized local producer services. Based on this, we consider a city with a traded-good industry and a service-good industry, where the latter supplies a large variety of specialized services to the former. In our model, instead of using the concept of external economies, we introduce the market for specialized services and consider explicitly the production and consumption of these services. The market for intermediate services is described by a Chamberlinian monopolistic competition model. The central idea behind our model is that increasing returns to scale in the service industry and the desire of the traded-good industry to employ a variety of intermediate services may provide the basic sources of industrial agglomeration in the city; that is, the larger the variety of intermediate services the higher is the productivity of the traded-good industry. -from Authors
This paper considers the empirical literature on the nature and sources of urban increasing returns, also known as agglomeration economies. An important aspect of these externalities that has not been previously emphasized is that the effects of agglomeration extend over at least three different dimensions. These are the industrial, geographic, and temporal scope of economic agglomeration economies. In each case, the literature suggests that agglomeration economies attenuate with distance. Recently, the literature has also begun to provide evidence on the microfoundations of external economies of scale. The best known of these sources are those attributed to Marshall (1920): labor market pooling, input sharing, and knowledge spillovers. Evidence to date supports the presence of all three of these forces. In addition, there is also evidence that natural advantage, home market effects, consumption opportunities, and rent-seeking all contribute to agglomeration.
Workers in cities earn 33% more than their nonurban counterparts. A large amount of evidence suggests that this premium is not just the result of higher ability workers living in cities, which means that cities make workers more productive. Evidence on migrants and the cross effect between urban status and experience implies that a significant fraction of the urban wage premium accrues to workers over time and stays with them when they leave cities. Therefore, a portion of the urban wage premium is a wage growth, not a wage level, effect. This evidence suggests that cities speed the accumulation of human capital.
This handbook chapter studies the theoretical micro-foundations of urban agglomeration economies. We distinguish three types of micro-foundations, based on sharing, matching, and learning mechanisms. For each of these three categories, we develop one or more core models in detail and discuss the literature in relation to those models. This allows us to give a precise characterisation of some of the main theoretical underpinnings of urban agglomeration economies, to discuss modelling issues that arise when working with these tools, and to compare different sources of agglomeration economies in terms of the aggregate urban outcomes they produce as well as in terms of their normative implications.
Studies have suggested that urban agglomeration enhances productivity by facilitating the firm-worker matching process. This article develops a model that formalizes this notion and demonstrates that, when firm capital and worker skill are complementary in production, urban agglomeration will tend to generate more efficient, yet segregated matches. As a result, not only will local market size be positively associated with average productivity, it will also generate greater between-skill-group wage inequality and a higher expected return to skill acquisition. Recent data from the counties and metropolitan areas of the United States is consistent with each of these implications. Copyright 2001 by University of Chicago Press.
The model of job search involves both employer matches and career matches. Workers may change employers without changing careers but cannot search over possible lines of work while working for one employer. The optimal policy implies a two-stage search strategy in which workers search over types of work first. The patterns of job changes observed in the National Longitudinal Survey of Youth support this two-stage search policy. Among male workers who are changing jobs, those who have previously changed employers while working in their current career are much less likely to change careers during the current job change. Copyright 1999 by University of Chicago Press.
Results from the Displaced Worker Surveys show that the wage cost of switching industries following displacement is strongly correlated with predisplacement measures of both work experience and tenure. Workers apparently receive compensation for some skills that are neither completely general nor firm-specific but rather specific to their industry or line of work. Further, among displaced workers who find new jobs in their predisplacement industry, postdisplacement returns to predisplacement job tenure resemble cross-section estimates of the returns to current seniority. This suggests that firm-specific factors may contribute little to the observed slope of wage-tenure profiles. Copyright 1995 by University of Chicago Press.
If economic growth relies upon the extent-of-the-market, then openness will decrease the connection between initial income
and later growth. Alternatively, learning-by-doing models suggest that wealth will be more positively correlated with growth
in open economies, because trade causes advanced economies to specialize in products with more opportunities for learning.
We examine twentieth century less developed countries and nineteenth century U. S. states. In both data sets, there is a much
stronger correlation between growth and initial wealth among closed economies. These findings support the importance of the
extent-of-the-market, and aggregate demand in fostering growth.
We study the joint processes of job mobility and wage growth among young men drawn from the Longitudinal Employee-Employer Data. Following individuals at three month intervals from their entry into the labor market, we track career patterns of job changing and the evolution of wages for up to 15 years. Following an initial period of weak attachment to both the labor force and particular employers, careers tend to stabilize in the sense of strong labor force attachment and increasing durability of jobs. During the first 10 years in the labor market, a typical young worker will work for seven employers, which accounts for about two-thirds of the total number of jobs he will hold in his career. The evolution of wages plays a key role in this transition to stable employment: we estimate that wage gains at job changes account for at least a third of early-career wage growth, and that the wage is the key determinant of job changing decisions among young workers. We conclude that the process of job changing for young workers, while apparently haphazard, is a critical component of workers' move toward the stable employment relations that characterize mature careers.
A lo largo de la historia econ�mica moderna, los salarios reales han sido un buen indicador del nivel de vida material de la clase trabajadora. Este documento presenta series de salarios reales para diferentes sectores y �pocas en Colombia. Apoy�ndonos en datos compilados por varios autores, nuestra principal conclusi�n es que a lo largo de los �ltimos 170 a�os, los salarios reales en Colombia han aumentado menos que el crecimiento de PIB per capita. Esto puede ser una causa parcial de la mala distribuci�n del ingreso en la actualidad en Colombia.
This paper examines resource allocation in a system of cities with heterogenous workers and firms and imperfect information. We derive an agglomeration economy in the labor market from a matching process between workers and firms, and show that it has the characteristics of a local public good. We illustrate two externalities associated with firm location, and show that they render free entry equilibria inefficient. We analyze the formation of equilibrium cities as a game, and argue that since profit maximizing land developers cannot control the number of firms directly, they cannot attain efficient city sizes.
The aim of this paper is to track the location decisions of knowledge-intense firms in a redeveloped urban district in the city of Barcelona in which government policy has promoted the formation of a cluster of knowledge-based activities. After decades of economic and industrial stagnation in a district called Poblenou, in the year 2000 the City Council of Barcelona implemented a plan to renew the area’s urban and economic structure. Under the development plan, knowledge-based firms were encouraged to set up in the area creating a cluster of advanced activities. This paper examines the success of this local policy and aims to determine whether cluster amenities have played a part in attracting knowledge-based activities. First, we evaluate the cluster implementation via a differences-in-differences analysis comparing the increase in the number of knowledge-based firms in this specific area with the increase of this kind of firm elsewhere in the city and the metropolitan area. Second, to test whether cluster amenities are determinant factors for the location of knowledge-based firms, we perform a multivariate regression analysis explaining intra-city firm location at the ZIP code level. Data about new firms come from a business-census that contains detailed information about location determinants of these firms as well as their characteristics.
This Paper studies the theoretical micro-foundations of urban agglomeration economies. We distinguish three types of micro-foundations, based on sharing, matching, and learning mechanisms. For each of these three categories, we develop one or more core models in detail and discuss the literature in relation to those models. This allows us to give a precise characterization of some of the main theoretical underpinnings of urban agglomeration economies, to discuss modeling issues that arise when working with these tools, and to compare different sources of agglomeration economies in terms of the aggregate urban outcomes they produce as well as in terms of their normative implications.
Job Mobility and the Careers of Young Men USA Counties 1998 on CD-ROM. [machine readable data file] The Bureau
- R Topel
- M Ward
Topel, R. and M. Ward. (1992) “Job Mobility and the Careers of Young Men.” Quarterly Journal of Economics. 107 (2), 439-479. 34 rU.S. Bureau of the Census. (1999) USA Counties 1998 on CD-ROM. [machine readable data file]. Washington, D.C.: The Bureau
USA Counties 1998 on CD-ROM. [machine readable data file]
U.S. Bureau of the Census. (1999) USA Counties 1998 on CD-ROM. [machine readable
data file]. Washington, D.C.: The Bureau.