We thank participants at the 2002 Western Regional Science Association Meetings in Monterey, California, for their beneficial comments, especially by Raymond Florax and Jason Henderson. We also thank seminar participants at University of Chicago and the University of Saskatchewan, as well as three anonymous referees for their comments on an earlier version of this paper.
Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?*
Article first published online: 21 JUN 2004
Journal of Regional Science
Volume 44, Issue 2, pages 201–224, May 2004
How to Cite
Adamson, D. W., Clark, D. E. and Partridge, M. D. (2004), Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?. Journal of Regional Science, 44: 201–224. doi: 10.1111/j.0022-4146.2004.00334.x
- Issue published online: 21 JUN 2004
- Article first published online: 21 JUN 2004
- Received: June 2002; Revised: March 2003; Accepted: July 2003.
There are several hypotheses why urban scale affects wages. Most focus on agglomeration economies that increase labor demand, especially for high-skilled workers (e.g., dynamic externalities stress knowledge transfers, and imply the urban wage gap favors skilled workers). Others stress urban amenities that increase labor supply and decrease wages. Amenities should have a stronger influence on affluent households if they are normal goods. By examining whether urban-scale affects net returns to education, it can be determined whether skilled workers are influenced more by urban productivity or amenities. Empirical results suggest net returns to education decline with urban scale, implying a key role for urban amenities in affecting skilled workers.