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Title: Inter-City Compensating Wage Differentials and Intra-City Workplace Centralization
Citation Type: Working Paper
Publication Year: 2008
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Abstract: We are grateful to Richard Arnott and three anonymous referees for their very valuable comments and suggestions. 2 Abstract: We explore the interaction of inter-city and intra-city compensating wage differentials by occupation. Our conjecture is that more central occupations receive higher wage premiums in larger cities, since workers in those occupations face a less desirable locus of housing prices and commuting times than those who have jobs in residential areas. The two main contributions of the paper are: 1) construction of an index of occupational centralization that accounts for differences between the density of employment where job holders in an occupation work and the overall employment density pattern, and 2) empirical confirmation that compensating differentials in larger cities are larger for more central occupations. The results are robust to the inclusion of individual-specific human capital variables and city-specific controls. These findings have implications for wage indexes used to construct real wage measures for academic research or in funding formulas where resource allocations are adjusted for labor cost differences across areas.
Url: https://pdfs.semanticscholar.org/88a0/7697891595e890b940ebb30a8679ee90794e.pdf
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Authors: Dewey, Jim; Rojas, Gabriel Montes
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Publication Number: MS #2007-0051-2
Institution: University of Florida
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Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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