Estimating Agglomeration Economies with History, Geology, and Worker Effects

Gilles Duranton, Pierre-Philippe Combes, Laurent Gobillon and Sébastien Roux ()

No 6728, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Does productivity increase with density? We revisit the issue using French wage and TFP data. To deal with the ?endogenous quantity of labour? bias (i.e., urban agglomeration is consequence of high local productivity rather than a cause), we take an instrumental variable approach and introduce a new set of geological instruments in addition to standard historical instruments. To deal with the ?endogenous quality of labour? bias (i.e., cities attract skilled workers so that the effects of skills and urban agglomeration are confounded), we take a worker fixed-effect approach with wage data. We find modest evidence about the endogenous quantity of labour bias and both sets of instruments give a similar answer. We find that the endogenous quality of labour bias is quantitatively more important.

Keywords: Agglomeration economies; Instrumental variables; TFP; Wages (search for similar items in EconPapers)
JEL-codes: R12 R23 (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

Downloads: (external link)
https://cepr.org/publications/DP6728 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Chapter: Estimating Agglomeration Economies with History, Geology, and Worker Effects (2010)
Working Paper: Estimating agglomeration economies with history, geology and worker effects (2010)
Working Paper: Estimating agglomeration economies with history, geology and worker effects (2010)
Working Paper: Estimating Agglomeration Economies with History, Geology and Worker Effects (2008)
Working Paper: ESTIMATING AGGLOMERATION ECONOMIES WITH HISTORY, GEOLOGY, AND WORKER EFFECTS (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6728

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6728

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().