What Drives the Urban Wage Premium? Evidence Along the Wage Distribution

40 Pages Posted: 21 Dec 2013

See all articles by Alessia Matano

Alessia Matano

University of Rome I

Paolo Naticchioni

University of Rome I; University of Cassino

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Abstract

This paper aims at disentangling the role played by different explanations on the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from lower to higher density areas in Italy, using quantile regressions and individual data. The results show that unskilled workers benefit more from a wage premium accruing over time, while skilled workers enjoy a wage premium when they migrate as well as a wage increase over time. Further, we find that for unskilled workers the wage growth over time is mainly due to human capital accumulation, consistently with the "learning" hypothesis, while for skilled workers it is the "coordination" hypothesis that matters.

Keywords: urban wage premium, human capital, spatial sorting, wage distribution, quantile fixed effects

JEL Classification: J31, J61, R23

Suggested Citation

Matano, Alessia and Naticchioni, Paolo, What Drives the Urban Wage Premium? Evidence Along the Wage Distribution. IZA Discussion Paper No. 7811. Available at SSRN: https://ssrn.com/abstract=2370777

Alessia Matano (Contact Author)

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

Paolo Naticchioni

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

University of Cassino ( email )

Cassino
Italy

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