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Urban Studies and Planning Commons

Open Access. Powered by Scholars. Published by Universities.®

2013

Economics

Selected Works

PHILIP E GRAVES

Wage convergence

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Full-Text Articles in Urban Studies and Planning

Spatial Equilibrium In The Labor Market, Philip E. Graves Jan 2013

Spatial Equilibrium In The Labor Market, Philip E. Graves

PHILIP E GRAVES

The paper discusses two approaches to spatial equilibrium in the labor market. The more traditional approach of labor economics assumes wage differentials represent arbitrageable differences in utility, with implications 1) that migration should be toward higher wage areas and 2) that migration flows will lead to convergence in wages over space. The more recent approach of urban/regional economics follows Roback in examining the implications of assumed equilibrium in utility over space. In this view wage differentials are compensatory (along with rent differentials) for amenity variation over space. The implications for wage convergence over space are complicated, but in general ...