Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311163 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2997
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We examine how agglomeration economies have influenced labour earnings in France over forty years. First, we define cities dynamically to account for their changing footprints. Our findings show that aggregate wage growth is mainly driven by growth in larger cities, rather than smaller ones or by population shifts across cities. We estimate individual wages incorporating time-varying city and individual fixed effects, and analyse how city characteristics (employment density, area, and market access) and their returns impact wage evolution. Changes in the values of these characteristics have minimal effect, but changes in their returns significantly influence wages, with notable variation across cities. Overall, aggregate wage growth in France reflects larger returns to larger city size. Our model, that incorporate the impact of agglomeration economies on city size and population, suggests that changes in returns do not drive population or area changes sufficiently to impact aggregate labour earnings, supporting our empirical findings.
Subjects: 
Agglomeration economies
endogenous city size
growth
wages
JEL: 
R23
J31
J61
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6900-0
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.