Abstract:
|
This paper estimates the determinants of productivity differentials across urban areas
in Spain. To do so we resort to Spanish Social Security administrative data (MCVL)
matched with workers’ fiscal information. We use two-step approach that allows us to
control for the confounding effects due to the sorting of more productive workers and
more productive firms in bigger cities. Our results indicate that city size is a significant
determinant of productivity differentials across Spanish urban areas. We estimate an
elasticity of urban agglomeration of 3.3%, which is within the range of values already
observed in other countries. We also find that the level of human capital, firm size and
the level of industrial specialization also matters in order explain productivity
differentials across Spanish cities.
Keywords: Agglomeration, wages, productivity, city size.
JEL codes: R10, R23, J31 |