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REGIONAL WAGE DIFFERENCES IN THE NETHERLANDS: MICRO EVIDENCE ON AGGLOMERATION EXTERNALITIES
Author(s) -
Groot Stefan P.T.,
Groot Henri L.F.,
Smit Martijn J.
Publication year - 2014
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/jors.12070
Subject(s) - externality , economics , economies of agglomeration , romer , wage , productivity , competition (biology) , labour economics , arrow , economic geography , microeconomics , macroeconomics , geography , ecology , cartography , biology , computer science , programming language
Based on micro data on individual workers for the period 2000–2005, we show that wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics. Remaining effects are partially explained by variations in employment density, with an elasticity of about 4.8 percent, and by Marshall‐Arrow‐Romer externalities, where doubling the local share of a (two‐digit) industry results in a 2.9 percent higher productivity. We also find evidence for small negative effects of competition (Porter externalities) and diversity (Jacobs externalities).