REGIONAL WAGE DIFFERENCES IN THE NETHERLANDS: MICRO EVIDENCE ON AGGLOMERATION EXTERNALITIES

Stefan P.T. Groot, Henri de Groot and Martijn Smit

Journal of Regional Science, 2014, vol. 54, issue 3, 503-523

Abstract: type="main">

Based on micro data on individual workers for the period 2000–2005, we show that wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics. Remaining effects are partially explained by variations in employment density, with an elasticity of about 4.8 percent, and by Marshall-Arrow-Romer externalities, where doubling the local share of a (two-digit) industry results in a 2.9 percent higher productivity. We also find evidence for small negative effects of competition (Porter externalities) and diversity (Jacobs externalities).

Date: 2014
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Related works:
Working Paper: Regional wage differences in the Netherlands: Micro-evidence on agglomeration externalities (2011)
Working Paper: Regional Wage Differences in the Netherlands: Micro-Evidence on Agglomeration Externalities (2011)
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