ESTIMATING AGGLOMERATION ECONOMIES WITH HISTORY, GEOLOGY, AND WORKER EFFECTS

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

Working Papers from HAL

Abstract: Does productivity increase with density? We revisit the issue usingFrench 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 dealwith 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 theendogenous 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; wages; TFP (search for similar items in EconPapers)
Date: 2008-12-15
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00347451v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (57)

Downloads: (external link)
https://shs.hal.science/halshs-00347451v1/document (application/pdf)

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:hal:wpaper:halshs-00347451

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().