cover image: Cities and growth : Earnings levels across urban and rural areas : the role of human capital

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Cities and growth : Earnings levels across urban and rural areas : the role of human capital

8 Sep 2009

Using 2001 Census data, this paper investigates the extent to which the urban-rural gap in the earnings of employed workers is associated with human capital composition and agglomeration economies. Both factors have been theoretically and empirically linked to urban-rural earnings differences. Agglomeration economies--the productivity enhancing effects of the geographic concentration of workers and firms--may underlie these differences as they may be stronger in larger urban centres. But human capital composition may also drive the urban-rural earnings gap if workers with higher levels of education and/or experience are more prevalent in cities. The analysis finds that up to one-half of urban-rural earnings differences are related to human capital composition. It also demonstrates that agglomeration economies related to city size are associated with earnings levels, but their influence is significantly reduced by the inclusion of controls for human capital.
economics economy cities canada econometrics geography human capital immigrants immigration mathematics rural population statistics census metropolitan area agglomeration economies city wage differentials correlation and dependence ols census geographic units of canada economy of canada cma endogeneity coefficient of determination city dwellers r-squared econometric urban-rural earnings differences
ISBN
9781100137995
Pages
40
Published in
Canada

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