European Regional Science Association
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European Regional Science Association
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The abstract for paper number 418:
Morten Marott Larsen, Institute of Economics, University of Copenhagen.
Institute of Local Government Studies - Denmark., Copenhagen, Denmark
Regional wage differentials - does distance matter?
This paper uses econometric methods to analyse causes of regional wage differentials in Denmark for the period1996-1999 and quantifies the importance of spatial proximity. Grouped data sets are used. Two concepts of distance are investigated. The first assumes that there is a positive production externality present in a centre that declines as the distance to the centre increases. Different definitions of a centre are tested. The second distance concept is commuting distance. Both distance measures have the expected sign and are significant, but the effects are small.
JEL classification: J31
Key words: Wage differentials, distance, grouped data.