Do urban wage premia reflect lower amenities? Evidence from Africa

Douglas Gollin (), Martina Kirchberger and David Lagakos

Journal of Urban Economics, 2021, vol. 121, issue C

Abstract: In most developing countries, wages are substantially higher in cities than in rural areas. One possible explanation is that the higher wage levels of urban areas are offset by lower non-monetary amenities. This paper draws on new high-resolution evidence to document how non-monetary amenities vary between urban and rural areas within 20 Sub-Saharan African countries. We focus on measures of public goods, crime and pollution. We find that in almost all countries, and for almost all measures, the quality of amenities is at least as high in cities as in rural areas. This finding casts doubt on the hypothesis that urban wage premia in the developing world represent a compensation for lower amenities.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:121:y:2021:i:c:s0094119020300723

DOI: 10.1016/j.jue.2020.103301

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