An Empirical Index for Labor Market Density

• Autores: Coen N. Teulings, Pieter A. Gautier
• Localización: The Review of economics and statistics, ISSN 0034-6535, Vol. 85, Nº 4, 2003, págs. 901-908
• Idioma: inglés
• DOI: 10.1162/003465303772815808
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• Resumen

  • We derive a structural index for labor market density based on the Ellison-Glaeser index for industry concentration. The labor market density index serves as a proxy for the number of workers that are potentially available for jobs in a particular area. The index is based on observed home-work location patterns. It is particularly useful for testing theories where the scale of the market matters. We apply this index to a standard wage equation and find that it explains almost half of the cross-region wage variance.