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Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital

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  • Beckstead, Desmond Brown, W. Mark Guo, Yusu Newbold, Bruce

Abstract

Using 2001 Census data, this paper investigates the extent to which the urban-rural gap in the earnings of employed workers is associated with human capital composition and agglomeration economies. Both factors have been theoretically and empirically linked to urban-rural earnings differences. Agglomeration economies-the productivity enhancing effects of the geographic concentration of workers and firms-may underlie these differences as they may be stronger in larger urban centres. But human capital composition may also drive the urban-rural earnings gap if workers with higher levels of education and/or experience are more prevalent in cities. The analysis finds that up to one-half of urban-rural earnings differences are related to human capital composition. It also demonstrates that agglomeration economies related to city size are associated with earnings levels, but their influence is significantly reduced by the inclusion of controls for human capital.

Suggested Citation

  • Beckstead, Desmond Brown, W. Mark Guo, Yusu Newbold, Bruce, 2010. "Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital," The Canadian Economy in Transition 2010020e, Statistics Canada, Economic Analysis Division.
    • Handle: RePEc:stc:stcp1e:2010020e
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    File URL: http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=11-622-M2010020&lang=eng
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    Citations

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    Cited by:

    1. K. Bruce Newbold & W. Mark Brown, 2012. "Testing and Extending the Escalator Hypothesis: Does the Pattern of Post-migration Income Gains in Toronto Suggest Productivity and/or Learning Effects?," Urban Studies, Urban Studies Journal Limited, vol. 49(15), pages 3447-3465, November.
    2. Benjamin Dachis, 2015. "Tackling Traffic: The Economic Cost of Congestion in Metro Vancouver," e-briefs 206, C.D. Howe Institute.
    3. Sébastien Breau & Dieter F. Kogler & Kenyon C. Bolton, 2014. "On the Relationship between Innovation and Wage Inequality: New Evidence from Canadian Cities," Economic Geography, Taylor & Francis Journals, vol. 90(4), pages 351-373, October.
    4. Stuart Donovan & Thomas de Graaff & Henri L. F. de Groot & Carl C. Koopmans, 2024. "Unraveling urban advantages—A meta‐analysis of agglomeration economies," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 168-200, February.
    5. K. Bruce Newbold & W. Mark Brown, 2015. "The Urban–Rural Gap In University Attendance: Determinants Of University Participation Among Canadian Youth," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 585-608, September.
    6. Todd Gabe & Jaison Abel & Adrienne Ross & Kevin Stolarick, 2012. "Knowledge in Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(6), pages 1179-1200, May.
    7. Ben Dachis, 2013. "Cars, Congestion and Costs: A New Approach to Evaluating Government Infrastructure Investment," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 385, July.
    8. Johanna Alexandra Narváez Jácome, 2019. "Evaluación de impacto de la política pública de inclusión a la educación secundaria a los pueblos y nacionalidades étnicas en el Ecuador. Periodo 2004 – 2016," CEFIP, Working Papers 032, CEFIP, Universidad Nacional de La Plata.

    More about this item

    Keywords

    Education; training and learning; Business performance and ownership; Labour; Educational attainment; Regional and urban profiles; Wages; salaries and other earnings;
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