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Urban Governance Structure and Wage Disparities across US Metropolitan Areas

Author

Listed:
  • Licia Ferranna

    (Ca' Foscari University of Venice, Department of Economics)

  • Margherita Gerolimetto

    (Ca' Foscari University of Venice, Department of Economics)

  • Stefano Magrini

    (Ca' Foscari University of Venice, Department of Economics)

Abstract

This paper analyses the determinants of spatial wage disparities in the US context for the period 1980-2000. Agglomeration benefits are estimated based on city productivity premia which are computed after controlling for the skills distribution among metropolitan areas as well as industry fixed effects. The drivers of productivity differentials that are taken into consideration are the size of the local economy, the spatial interactions among local autonomous economic systems and the structure of urban governance as well as the policy responses to the fragmentation issue. A metropolitan area with ten percentage more administrative units than another of the same size, experiences wages that are between 2.0% and 3.0% lower. The presence of a voluntary governance body is found to mitigate the problem of fragmentation only marginally, while the existence of special purpose districts have a negative impact on regional productivity. The implementation of a metropolitan government with a regional tax system is expected to increase productivity by around 6%.

Suggested Citation

  • Licia Ferranna & Margherita Gerolimetto & Stefano Magrini, 2016. "Urban Governance Structure and Wage Disparities across US Metropolitan Areas," Working Papers 2016:26, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2016:26
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    More about this item

    Keywords

    Governance; Productivity; Metropolitan Statistical Areas; Agglomeration Econonomies;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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