Most "wage curve" studies ignore the geography of local labor markets. However, when a local labor market is in close proximity of other labor markets, a local shock that increases unemployment may not lead to lower pay rates if employers fear outward migration of their workers. Hence, the...

type="main" <title type="main">ABSTRACT</title> <p>This paper estimates individual wage equations to test two rival non-nested theories of economic agglomeration, namely New Economic Geography (NEG), as represented by the NEG wage equation and urban economic (UE) theory, in which wages relate to employment density. In the...</p>