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Title: Wage Differentials and the Spatial Concentration of High-tech Industries

Citation Type: Journal Article

Publication Year: 2009

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Abstract: Workers in high-tech cities earn raw wages that are on average 17% higher than wages of workers in other cities. Using a large sample from the 5% PUMS of the 2000 Census of Population, this paper presents econometric evidence of a tech-city wage premium of approximately 4.6% that is not the result of higher-ability people self-selecting to live in high-tech cities, but rather the result of high-tech cities actually making workers more productive. Although knowledge spillovers are difficult to assess, we use the concepts of the new economic geography and evidence from empirical studies of high-technology regions, such as Silicon Valley and Austin, Texas, to support the view that workers who live in high-tech cities might be more productive because they benefit from a larger supply of knowledge spillovers than workers who live in low-tech cities.

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Authors: Echeverri-Carroll, Elsie; Ayala, Sofia

Periodical (Full): Papers in Regional Science

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Volume: 88

Pages: 623-641

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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