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Regional wage differences in the Netherlands: Micro-evidence on agglomeration externalities

Stefan Groot (), Henri de Groot () and Martijn Smit ()
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Stefan Groot: CPB Netherlands Bureau for Economic Policy Analysis

CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: Based on micro-data on individual workers for the period 2000–2005, we show that regional wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics of workers. Remaining effects are partially explained by variations in employment density, with an elasticity of about 3.8 percent and by Marshall-Arrow-Romer externalities, where doubling the share of a (2-digit NACE) industry results in a 2.4 percent higher productivity. We find evidence for a negative effect of competition (associated with Porter externalities) and diversity (associated with Jacobs externalities).

JEL-codes: J24 O12 R11 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-geo, nep-lab, nep-lma, nep-sbm and nep-ure
Date: 2011-07
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Related works:
Journal Article: REGIONAL WAGE DIFFERENCES IN THE NETHERLANDS: MICRO EVIDENCE ON AGGLOMERATION EXTERNALITIES (2014) Downloads
Working Paper: Regional Wage Differences in the Netherlands: Micro-Evidence on Agglomeration Externalities (2011) Downloads
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