Department of Economics and Business - Universitat Pompeu Fabra

Title:: Technology diffusion and the spatial distribution of wages in the US
Author:: Antonio Ciccone
Date:: October 1997 (Revised: December 1999)
Abstract:: What explains the spatial distribution of wages across US counties? I find that two of the most important factors are spatial technology diffusion and externalities due to the aggregate scale of production. One empirical finding supporting the importance of spatial technology diffusion is that average wages in a county decrease with the average level of schooling in neighboring counties when employment in the county and average wages in neighboring counties are held constant. All empirical results are obtained using a novel instrument for (endogenous) employment at the county-level and take into account other factors (e.g. productivity-differences across states, climate) that may determine wages.
Keywords:: US spatial wage distribution, spatial technology diffusion, dynamic spatial externalities, spatial fixed effects
JEL codes:: O30, O40, R10
Area of Research:: Macroeconomics and International Economics

Download the paper in PDF format