Increasing returns: evidence from local wage rates in Great Britain

Author: Fingleton B.

Source: Oxford Economic Papers, Volume 55, Number 4, October 2003 , pp. 716-739(24)

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Abstract:

This paper shows that wage rate variations among local areas of Great Britain are significantly positively related to employment density, and argues that this is due to the presence of increasing returns deriving from more varied producer services in denser areas, controlling for the effect on wages of good access to an efficient workforce, either locally or as a result of in-commuting. The higher wages in Greater London in particular are seen to be linked to increasing returns and enhanced worker efficiency, although other central city areas show similar influences to a lesser degree, with in-commuting a significant factor.

Document Type: Research article

Affiliations: 1: Department of Land Economy, University of Cambridge, Cambridge, CB3 9EP;, Email: bf100@cam.ac.uk

Publication date: 2003-10-01

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Oxford Economic Papers is a general economics journal, publishing refereed papers in economic theory, applied economics, econometrics, economic development, economic history, and the history of economic thought. It occasionally publishes survey articles in addition to original papers. Books are not reviewed, but substantial review articles are considered. The journal occasionally publishes survey articles in addition to original papers, and occasionally publishes special issues or symposia.