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An Empirical Measure for Labor Market Density

Pieter Gautier () and Coen N. Teulings ()
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Coen N. Teulings: SEO, University of Amsterdam

No 00-036/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: In this paper we derive a structural measure for labor market density based on the Ellison and Glasear (1997) "Index for industry concentration". This labor market density measure serves as a proxy for the number of workers that can reach a certain work area within a reasonal amount of traveling time. We apply this measure to a standard wage equation and find that it takes account of almost half of the cross region wage variance (not explained by other observables). Moreover, it explains substantially more than the traditional density measure: people per square mile.

Keywords: labor market density; wage equation (search for similar items in EconPapers)
JEL-codes: J21 J30 J60 J23 (search for similar items in EconPapers)
Date: 2000-04-27
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