The spatial extent of agglomeration economies across the wage earnings distribution

We investigate the spatial extent of agglomeration economies across the wage earnings distribution using economic mass (total employment) in four distance bands around each individual’s establishment in a quantile regression framework. We control for observable and unobservable individual and establishment characteristics. Remaining endogeneity in the model is assessed with a set of instrumental variables. Results indicate a positive effect of economic mass on wage earnings up to 25 km away from the establishment. The spatial extent of agglomeration economies is similar across the wage earnings distribution. However, increases in economic mass shift the wage earnings distribution in a nonsymmetric way.