A quantitative assessment of the role of agglomeration economies in the spatial concentration of U.S. employment

Satyajit Chatterjee ()

No 06-20, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: This paper seeks to quantify the contribution of agglomeration economies to the spatial concentration of U.S. employment. A spatial macroeconomic model with heterogeneous localities and agglomeration economies is developed and calibrated to U.S. data on the spatial distribution of employment. The model is used to answer the question: By how much would the spatial concentration of employment decline if agglomeration economies were counterfactually suppressed? For the most plausible calibration, the answer is about 48 percent. More generally, the general equilibrium contribution of agglomeration economies appears to be substantial, with empirically defensible calibrations yielding estimates between 40 and 60 percent.

Keywords: Employment (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-ure
Date: 2006
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