() and Gunnar Isacsson
Johan Håkansson: HUI Research, Postal: HUI Research, SE-103 29 Stockholm, Sweden and Dalarna University, SE-791 88, Falun, Sweden
Gunnar Isacsson: The Swedish National Road and Transport Research Institute (VTI), Postal: 781 29 Borlänge, Sweden,
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.
34 pages, October 3, 2013
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