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Wages and Industrial Clusters in Rio Grande Do Sul (Brazil)

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  • Leonardo Monasterio
  • Mauro Salvo

Abstract

The paper estimates the effects of agglomeration economies on wages of industrial workers in the state of Rio Grande do Sul, Brazil. The techniques of Exploratory Analysis of Spatial Data are used to locate the clusters of the states’ industry in 2000. Then, this information was combined to census microdata in order to run wage regressions inspired by the empirical tests of New Economic Geography models (HANSON, 1998, specially). The results were statistically and economically significant: even when controlled by demographic variables, the individual wages of industrial workers were higher on the cities with larger population, more urbanized, higher market potential and closer to the economic centre of the Rio Grande do Sul. These findings indicate how intense the economic forces that shape the spatial structure of the state are, and suggest changes in current regional policies.

Suggested Citation

  • Leonardo Monasterio & Mauro Salvo, 2006. "Wages and Industrial Clusters in Rio Grande Do Sul (Brazil)," ERSA conference papers ersa06p930, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa06p930
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    References listed on IDEAS

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    1. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669, Elsevier.
    2. Juan Carlos Duque & Raúl Ramos & Jordi Suriñach, 2007. "Supervised Regionalization Methods: A Survey," International Regional Science Review, , vol. 30(3), pages 195-220, July.
    3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    4. Bernard Fingleton, 2006. "The new economic geography versus urban economics: an evaluation using local wage rates in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 501-530, July.
    5. Gordon H. Hanson, 2000. "Scale Economies and the Geographic Concentration of Industry," NBER Working Papers 8013, National Bureau of Economic Research, Inc.
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