Spatial wage disparities and the role of spatial labor sorting

Dusan Paredes

No 28, Documentos de Trabajo en Economia y Ciencia Regional from Universidad Catolica del Norte, Chile, Department of Economics

Abstract: Spatial wage inequality among Chilean counties reached its peak in 1994, when it represented 19.2% of total wage inequality. By 2009, spatial inequality had decreased to 10.3%. However, when the model included controls on human capital, spatial inequality fell to 6%. This result implies that spatial labor sorting accounts for an average of about 45% of the spatial wage disparity. These findings suggest that policymakers should consider ways to spread human capital throughout the nation as an alternative to reduce spatial inequality.

Keywords: Spatial income inequality; spatial sorting; multilevel regression. (search for similar items in EconPapers)
JEL-codes: R21 R23 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2012-09, Revised 2012-09
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