Urban Wages and Labor Market Agglomeration
William C. Wheaton
Massachusetts Institute of Technology (MIT) - Department of Economics
Mark J. Lewis
affiliation not provided to SSRN
September 28, 2000
Using the 5% public use micro sample of the 1990 U.S. census, we find that observationally equivalent workers in the manufacturing sector earn higher wages when they are in urban labor markets that have a larger share of national or metropolitan employment in their same occupation and industry groups. Quantitatively, the effect is large, with an elasticity (measured at the means) of between 1.2 and 3.6 for these effects. We interpret the willingness of firms to pay more for equivalent workers in dense markets as evidence of an agglomeration economy in urban labor.
Number of Pages in PDF File: 26
Date posted: November 22, 2000
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