The Review of Economics and Statistics Vol. 85 No. 4 2003
An Empirical Index for Labor Market Density
open access
Abstract
We derive a structural index for labor market density based on the Ellison-Glaeser index for industry concentration. The labor market density index serves as a proxy for the number of workers that are potentially available for jobs in a particular area. The index is based on observed home-work location patterns. It is particularly useful for testing theories where the scale of the market matters. We apply this index to a standard wage equation and find that it explains almost half of the cross-region wage variance.
- DOI
- 10.1162/003465303772815808
- Volume
- 85
- Issue
- 4
- Pages
- 901-908
- Language
- en
- Sources
- openalex crossref