Cities, Wages, and the Urban Hierarchy

We present evidence regarding the unequal spatial distribution of population in the north and south of Chile which implies that even when geographical distances to the main urban center are similar, the distances in a context of urban hierarchy are completely different. Given this economic geography, we postulate that Central Place Theory provides a better understanding for the study of city size wage gap in Chile. In order to test our hypothesis, we construct five tiers of urban hierarchy using the 2002 National Census and then contrast the effect generated by the urban hierarchy on worker wages using nine waves of the National Socioeconomic Characterization Survey (CASEN).