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labor markets, wages, migration, urban, rural economics


Previous studies of the linkage of national and regional labor markets have focused on aggregate employment growth and migration. By focusing on the separate effects of national and regional labor market economic conditions on wages, this study differs from much of the previous literature. In particular, this paper will extend the previous literature in two key directions. First, it will explore whether local economic activity and location-specific amenities have different effects on metropolitan and nonmetropolitan area wages. Second, it will determine how regional labor markets and locality amenities affect metro and non-metro migration of workers. These issues will be explored using 1979-1996 National Longitudinal Survey of Youth data merged with local labor market measures of amenities and economic conditions. In this preliminary draft, we explore the differential impact of amenities and local economic conditions on wages for metro versus non-metro workers in the 1988-1993 NLSY sample. Our findings suggest that there are differences in returns to human capital when comparing urban and rural workers. Moreover, compensating differentials for location-specific amenities and local labor market conditions also appear to depend on metro versus non-metro residence. Similarly, locality amenities and labor market conditions primarily influence both metro and non-metro migration decisions.


Department of Economics, South Dakota State University

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