Why Do Newer Cities Promise Higher Wages in Russia?

66 Pages Posted: 5 May 2018

See all articles by Alexander Skorobogatov

Alexander Skorobogatov

National Research University Higher School of Economics

Date Written: November 28, 2017

Abstract

This paper documents the negative relationship between the age of cities and their average wages in Russia and a number of post-Soviet countries. To determine age-related urban characteristics responsible for this relationship, we develop a spatial equilibrium model as a framework to guide the interpretation of the regression estimates. Higher real wages in newer cities reflect both their disadvantages as places for living and their production advantages. The latter are related to their production amenities, higher shares of skilled workers, and more available natural resources. These advantages and disadvantages tend to disappear over time, which gives rise to income convergence.

Keywords: Exhaustible Resources, Urban Development, Consumer Amenities

JEL Classification: R13, D51, P25

Suggested Citation

Skorobogatov, Alexander, Why Do Newer Cities Promise Higher Wages in Russia? (November 28, 2017). Journal of Urban Economics, 2018, Vol. 104, pp. 16-34., Available at SSRN: https://ssrn.com/abstract=3165481

Alexander Skorobogatov (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, RI Moscow 119017
Russia

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