Wages and the City. Evidence from Italy

Sabrina Di Addario and Eleonora Patacchini

No 231, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: We analyze empirically the impact of urban agglomeration on Italian wages. Using microdata from the Bank of Italy\'s Survey of Household Income and Wealth for the years 1995, 1998, 2000 and 2002 on more than 22,000 employees distributed in 242 randomly drawn local labor markets, we test whether the structure of wages varies with urban scale. We find that every additional 100,000 inhabitants in the local labor market raises earnings by 0.1 percent. The use of a geographical approach enables us to state that this effect decays very rapidly with distance, losing significance beyond approximately 12 kilometers. We also find that urbanization does not affect returns to experience and that it reduces returns to education and to tenure with current firm, while providing a premium to worker supervisors and office workers.

Keywords: Wages; Urbanization; Agglomeration Externalities; Population Clustering; Worker Mobility (search for similar items in EconPapers)
JEL-codes: J24 J31 O15 R12 (search for similar items in EconPapers)
Pages: 29
Date: 2007-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Wages and the City. Evidence from Italy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:231

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