Technology Diffusion and the Spatial Distribution of Wages in the U.S.

UPF Economics & Business Working Paper No. 500

25 Pages Posted: 8 Nov 2000

See all articles by Antonio Ciccone

Antonio Ciccone

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Date Written: December 1999

Abstract

What explains the spatial distribution of wages across U.S. counties? I find that two of the most important factors are spatial technology diffusion and externalities due to the aggregate scale of production. One empirical finding supporting the importance of spatial technology diffusion is that average wages in a county decrease with the average level of schooling in neighboring counties when employment in the county and average wages in neighboring counties are held constant. All empirical results are obtained using a novel instrument for (endogenous) employment at the county-level and take into account other factors (e.g., productivity-differences across states, climate) that may determine wages.

Keywords: U.S. spatial wage distribution, spatial technology diffusion, dynamic spatial externalities, spatial fixed effects

JEL Classification: O30, O40, R10

Suggested Citation

Ciccone, Antonio, Technology Diffusion and the Spatial Distribution of Wages in the U.S. (December 1999). UPF Economics & Business Working Paper No. 500. Available at SSRN: https://ssrn.com/abstract=243777 or http://dx.doi.org/10.2139/ssrn.243777

Antonio Ciccone (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34 93 542 1669 (Phone)
+34 93 542 1746 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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