Urban Governance Structure and Wage Disparities across US Metropolitan Areas

56 Pages Posted: 2 Nov 2016

See all articles by Licia Ferranna

Licia Ferranna

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Margherita Gerolimetto

Ca Foscari University of Venice

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia

Date Written: October 12, 2016

Abstract

This paper analyses the determinants of spatial wage disparities in the US context for the period 1980-2000. Agglomeration benefits are estimated based on city productivity premia which are computed after controlling for the skills distribution among metropolitan areas as well as industry fixed effects. The drivers of productivity differentials that are taken into consideration are the size of the local economy, the spatial interactions among local autonomous economic systems and the structure of urban governance as well as the policy responses to the fragmentation issue. A metropolitan area with ten percentage more administrative units than another of the same size, experiences wages that are between 2.0% and 3.0% lower. The presence of a voluntary governance body is found to mitigate the problem of fragmentation only marginally, while the existence of special purpose districts have a negative impact on regional productivity. The implementation of a metropolitan government with a regional tax system is expected to increase productivity by around 6%.

Keywords: Governance, Productivity, Metropolitan Statistical Areas, Agglomeration Economies

JEL Classification: H70, R12, R23, J3

Suggested Citation

Ferranna, Licia and Gerolimetto, Margherita and Magrini, Stefano, Urban Governance Structure and Wage Disparities across US Metropolitan Areas (October 12, 2016). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 26/WP/2016, Available at SSRN: https://ssrn.com/abstract=2862534 or http://dx.doi.org/10.2139/ssrn.2862534

Licia Ferranna (Contact Author)

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

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Margherita Gerolimetto

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

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