Regional Wage Differences in the Netherlands: Micro Evidence on Agglomeration Externalities

S.P.T. Groot, H.L.F. de Groot, M.J. Smit

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Based on micro data on individual workers for the period 2000-2005, we show that wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics. Remaining effects are partially explained by variations in employment density, with an elasticity of about 4.8 percent, and by Marshall-Arrow-Romer externalities, where doubling the local share of a (two-digit) industry results in a 2.9 percent higher productivity. We also find evidence for small negative effects of competition (Porter externalities) and diversity (Jacobs externalities). © 2013 Wiley Periodicals, Inc.
Original languageEnglish
Pages (from-to)503-523
JournalJournal of Regional Science
Volume54
Issue number3
Early online date13 Oct 2013
DOIs
Publication statusPublished - 2014

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