Area Disparities in Britain: Understanding the Contribution of People vs. Place Through Variance Decompositions

Gibbons, Stephen; Overman, Henry G.; Pelkonen, Panu

doi:10.1111/obes.12043

Cited by 56 publications

(48 citation statements)

References 15 publications

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“…In France, about half the spatial disparities in income are explained by the different locations of skilled and unskilled workers (Combes et al, 2008), while between 85 and 88 per cent of spatial wage disparities in the United Kingdom are explained by individual characteristics (Gibbons et al, 2014). The concentration of human capital and high-value activities in large cities is a marked feature of developed and emerging economies.…”

Section: 21mentioning

confidence: 99%

Skilled Cities and Efficient Urban Transport

Proost¹,

Thisse²

2017

Economics Without Borders

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This chapter surveys the fundamental forces that drive the formation and size of cities. We discuss the different types of agglomeration economies generated by a dense web of activities, with special emphasis on the benefits associated with the clustering of highly skilled workers. The distribution of activities within cities results from the trade-off between commuting and housing costs. We show that in this trade-off commuting costs are the cause and land rent is the consequence. The land rent capitalizes the advantages associated with proximity to particular urban locations such as employment centres. We identify the main sources of inefficiency in various urban policies implemented in Europe. Special attention is paid to the regulation of the land market and the pricing of urban transport. 9.

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Section: 21mentioning

confidence: 99%

Skilled Cities and Efficient Urban Transport

Proost¹,

Thisse²

2017

Economics Without Borders

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“…CVS is calculated as the share of the posterior mean of theory t to the variance of expenditure category j: CV S = var(Tr t ) var(govj ) . See Gibbons, Overman, and Pelkonen (2014).…”

Section: Variance Decompositionmentioning

confidence: 99%

Measuring the strength of the theories of government size

2019

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Existing theoretical and empirical evidence on the determinants of government expenditure is inconclusive. We posit that the main cause of this problem is theory uncertainty, which arises due to the fact that the different theories imply different mutually compatible and interrelated mechanisms. This paper proposes a novel model averaging method to perform model averaging in linear regression systems that allows for endogeneity. Using data for more than 90 countries we assess the evidentiary support for nine different theories. Our results suggest that the government size and its components are explained by multiple mechanisms that work simultaneously but differ in their impact and importance. In particular, for general government total expenditure we find decisive evidence for the demography theory and a strong evidence for the globalization and political institution theory. In the case of central government total expenditure, we find that income inequality and macroeconomic policy play a decisive role in addition to demography.

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“…Geographical LMA‐boundaries are shown in Figure and some further descriptive statistics in Appendix . Also, Gibbons, Overman, and Pelkonen () provide a wide range of statistics for wage differences across these areas.…”

Section: Working Hours Across Labour Market Areasmentioning

confidence: 99%

Real wages, amenities and the adjustment of working hours across local labour markets

Schlüter

2019

Papers in Regional Science

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High prices that are not offset by equally high incomes are often seen as an affordability problem. To get by, poorer workers in these areas might have to work longer hours. Alternatively, lower real wages might indicate a more desirable place to live and induce high‐income people to trade off cash for leisure time. Both interpretations suggest a link between real wages and an individual's labour supply choice. Using panel data, I observe how working hours change, when workers move place. I find that working hours increase by 0.42% for a 10% decrease of local real wage. The effect is stronger for low‐skilled workers at the bottom of the wage distribution, indicating an affordability mechanism that might further exacerbate inequality.

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Area Disparities in Britain: Understanding the Contribution of People vs. Place Through Variance Decompositions

Cited by 56 publications

References 15 publications

Skilled Cities and Efficient Urban Transport

Skilled Cities and Efficient Urban Transport

Measuring the strength of the theories of government size

Real wages, amenities and the adjustment of working hours across local labour markets

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