Scandinavian Working Papers in Economics
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No 97:
How Does Employment Density Influence Individuals' Wages? A Micro Data Approach.

Johan Håkansson () and Gunnar Isacsson

Abstract: We estimate the effect of employment density on wages in Sweden in a large geocoded data set on individuals and workplaces. Employment density is measured in four circular zones around each individual's place of living. The data contains a rich set of control variables that we use in an instrumental variables framework. Results show a relatively strong but rather local positive effect of employment density on wages. Beyond 5 kilometers the effect becomes negative. This might indicate that the effect of agglomeration economies falls faster with distance than the effects of congestion.

Keywords: agglomeration economies; accessibility; IV; Sweden; (follow links to similar papers)

JEL-Codes: J24; R10; R23; R40; (follow links to similar papers)

34 pages, October 3, 2013

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