Spatial Equilibrium Approach to the Analysis of Income Differentials Across Russian Cities
31 Pages Posted: 7 Sep 2016 Last revised: 9 Sep 2016
Date Written: September 5, 2016
This paper discusses a mechanism underlying the input allocations and income distributions across Russian cities of different ages. The empirical strategy is based on using the extended version of the Glaeser-Gottlieb model to guide the interpretation of regression estimates. The results are in line with previous evidence. Newer cities tend to pay higher real wages, but this is offset by the poor consumption amenities. Their opportunities to pay more are related to their productivity advantages resulting from their higher shares of skilled workforce, and more available natural resources. At the same time, these advantages and disadvantages tend to disappear with time, which gives rise to the income convergence.
Keywords: exhaustible resources, urban development, consumer amenities
JEL Classification: R12, Q32, O13
Suggested Citation: Suggested Citation