Spatial Wage Inequality in North America and Western Europe: Changes Between and Within Local Labour Markets 1975-2019

Luis Bauluz, Pawel Bukowski, Mark Fransham, Annie Lee, Margarita Lopez-Forero, Filip Novokmet, Sebastien Breau, Neil Lee, Clément Malgouyres, Moritz Schularick and Gregory Verdugo

Working papers from Banque de France

Abstract: Working Paper Series no. 957. The rise of economic inequalities in advanced economies has been often linked with the growThéof spatial inequalities within countries, yet there is limited comparative research that studies the relationship between national and subnational economic inequality. This paper presents the first systematic attempt to create internationally comparable evidence showing how different countries perform in terms of geographic wage inequalities. We create cross-country comparable measures of spatial wage disparities between and within similarly-defined local labour market areas (LLMAs) for Canada, France, (West) Germany, the UK and the US from the 1970s to 2010s, and assess their contribution to national inequality. By the end of the 2010s, spatial inequalities in LLMA average primary wages are similar in Canada, France, Germany and the UK; the US exhibits the highest degree of spatial inequality. Over the study period, spatial inequalities have nearly doubled in all countries, except for France where spatial inequalities have fallen back to 1970s levels, after an increase in the 1990s. Due to a concomitant increase in within-place inequality, the contribution of places in explaining national wage inequality has remained fairly constant over the 40-year study period, except in the UK where we document a significant increase. Whilst common global social, economic and technological shocks are important drivers of spatial inequality, this variation in levels and trends of spatial inequality opens the way to comparative research exploring the role of national institutions in mediating how global shocks translate into economic disparities between places.

Keywords: Regional Inequality; Wage Inequality; Local Labour Markets (search for similar items in EconPapers)
JEL-codes: J3 R1 R23 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2024
New Economics Papers: this item is included in nep-geo, nep-his, nep-lma, nep-tid and nep-ure
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Downloads: (external link)
https://www.banque-france.fr/system/files/2024-08/WP957_0.pdf

Related works:
Working Paper: Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 (2023)
Working Paper: Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 (2023)
Working Paper: Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 (2023)
Working Paper: Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 (2023)
Working Paper: Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 (2023)
Working Paper: Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 (2023)
Working Paper: Spatial wage inequality in North America and Western Europe: Changes between and within local labour markets 1975-2019 (2023)
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