Does the urban wage premium imply a higher firms’ labor share in big cities
Bibliographic Data
| ID | 21463685 |
|---|---|
| Authors | Florian Mayneris (0000-0002-6469-449X, corresponding author) |
| Year | 2025 |
| Volume | 115 |
| Pages | 104155 |
| Publication date | 2025-11-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Regional Science and Urban Economics (JOURNAL) |
| Journal identifiers | ISSN: 0166-0462 • E-ISSN: 1879-2308 |
| Publisher | Elsevier BV (PUBLISHER) |
| DOI | 10.1016/j.regsciurbeco.2025.104155 |
| OpenAlex | W4414785955 |
| Language | EN |
| References cited | 43 |
I find that on average, the firm-level labor share slightly increases with local employment density in the manufacturing sector, but this relationship is heterogeneous across industries. Through the lens of a theoretical framework featuring a CES production function, I show that this heterogeneity arises because both the density-elasticity of the relative cost of labor (adjusted for productivity) and the elasticity of substitution between capital and labor vary across industries. The magnitude of the effects I find implies that in several industries, agglomeration economies are not Hicks-neutral. Moreover, the higher the density-elasticity of the firms’ labor share, the lower their propensity to locate in denser areas, all else being equal
Efficiency wage · Wage · Wage growth · Wage Inequality · Wage share · Fiscal Policy and Economic Growth · Regional Economics and Spatial Analysis · Spatial and Panel Data Analysis
Chapter 48 Micro-foundations of urban agglomeration economies
Fixed and random effects models
Firm Sorting and Agglomeration
The Global Decline of the Labor Share
Learning by Working in Big Cities
The Decline of the U.S. Labor Share
Wage Bargaining with On-the-Job Search
The Rise of Market Power and the Macroeconomic Implications
The Fall of the Labor Share and the Rise of Superstar Firms
Chapter 49 Evidence on the nature and sources of agglomeration economies
Cities and Skills
The Race between Man and Machine
Artificial Intelligence and Jobs
How Densely Do Manufacturing Establishments Occupy Land
An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Units
The Productivity Advantages of Large Cities
The Costs of Agglomeration
Le Fichier de l'Ined
Monopsony in Labor Markets
The plant size-place effect
The billion pound drop
Spatial concentration and plant-level productivity in France
Spatial wage disparities
On the equivalence of location choice models
Urban agglomeration, capital augmenting technology, and labor market equilibrium
Urban agglomeration economies in the presence of technical change
The economic effects of density
Efficiency of resource usage and city size
Marshall's scale economies
Industrial Development in Cities
Identifying Agglomeration Spillovers
Growth in Cities
How Costly Are Markups
Automation and New Tasks
| Citation velocity | historical |
|---|---|
| Highly cited | No |