Regional price levels and the agglomeration wage differential in western Germany

Abstract

"We analyse whether wage differences between cities and rural areas in western Germany are due to unobserved differences in regional price levels. Since regional prices are available for only 10 % of the regions we use multiple imputation to generate prices for all regions. Our results show that the nominal agglomeration wage differential is 25 %, whereas the real differential is 19 %. If we control for the composition of the labour force and jobs, the real wage differential is 4 %. If we additionally control for differences in regional building land prices the agglomeration wage differential vanishes." (Author's abstract, IAB-Doku) ((en))

Cite article

Blien, U., Gartner, H., Stüber, H. & Wolf, K. (2009): Regional price levels and the agglomeration wage differential in western Germany. In: The annals of regional science, Vol. 43, No. 1, p. 71-88. DOI:10.1007/s00168-007-0205-8