Urban Wages and Labor Market Agglomeration

26 Pages Posted: 22 Nov 2000  

William C. Wheaton

Massachusetts Institute of Technology (MIT) - Department of Economics

Mark J. Lewis

affiliation not provided to SSRN

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Date Written: September 28, 2000

Abstract

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.

Suggested Citation

Wheaton, William C. and Lewis, Mark J., Urban Wages and Labor Market Agglomeration (September 28, 2000). Available at SSRN: https://ssrn.com/abstract=250981 or http://dx.doi.org/10.2139/ssrn.250981

William C. Wheaton (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Mark J. Lewis

affiliation not provided to SSRN

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