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WAGES, RENTS, AND AMENITIES: DIFFERENCES AMONG WORKERS AND REGIONS

Jennifer Roback

Open publisher page 357 citations

Abstract

What explains persistent regional earnings differences? This paper argues that regional differences in amenities can account for the wage differences; in contrast, cost of living variations do not account for wage differences, but actually exacerbate them. This conclusion results from a model in which variations in rents and wages are equalizing differences for amenity differences. Empirical results are consistent with the model.

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What this paper is about

What explains persistent regional earnings differences? This paper argues that regional differences in amenities can account for the wage differences; in contrast, cost of living variations do not account for wage differences, but actually exacerbate them. This conclusion results from a model in which variations in rents and wages are equalizing differences for amenity differences. Empirical results are consistent with the model.

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OpenAlex reports 357 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

What explains persistent regional earnings differences? This paper argues that regional differences in amenities can account for the wage differences; in contrast, cost of living variations do not account for wage differences, but actually exacerbate them. This conclusion results from a model in which variations in rents and wages are equalizing differences for amenity differences. Empirical results are consistent with the model.

Key concepts: Economic rent, Economics, Amenity, Earnings, Wage, Labour economics, Cost of living, Demographic economics

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