Work

The Spatial Distribution of Wages: Estimating the Helpman‐Hanson Model for Germany

Year: 2004

Type: article

Abstract: . Using German district data we estimate the structural parameters of a new economic geography model as developed by Helpman (1998) and Hanson (1998 , 2001a ). The advantage of the Helpman‐Hanson model is that it incorporates the fact that agglomeration of economic activity increases the prices of local (nontradable) services, like housing. This model thereby provides an intuitively appealing spreading force that allows for less extreme agglomeration patterns than predicted by the bulk of new economic geography models. Generalizing the Helpman‐Hanson model, we also analyze the implications for the spatial distribution of wages once the assumption of real wage equalization is dropped. If we no longer assume real wage equalization we find support for a spatial wage structure as well as for the relevance of the structural parameters of the theoretical model.

Source: Journal of Regional Science

DOI: 10.1111/j.0022-4146.2004.00344.x

Authors: Steven Brakman, Harry Garretsen, Marc Schramm

Institutions: Ifo Institute for Economic Research, University of Groningen, Radboud University Nijmegen, Utrecht University

Language: English

Topic: Regional Economics and Spatial Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W2123240482

FWCI: 18.27

Cites: 31

Cited by: 154

Related to: 10