The Wage Premium of City Size:Disentangling Agglomeration from Sorting Effect
In implementing a people-centric new urbanization strategy,it is important to explore the wage premium of city size and its underlying mechanisms.This is instrumental in understanding the labor migration behavior and the distribution of urban population,and it also has significant implication for enhancing the quality of new urbanization construction.This paper uses the micro data from 2012,2014,and 2016 China Labor-force Dynamics Survey(CLDS),and estimates the wage premium of city size,with special focus on the explanatory power of agglomeration and sorting effects.We find that,on average,a 1％increase in city size correlates with a 0.13％rise in wage,and the wage premium primarily originates from the sorting effect.In megacities with a population over 5 million,both agglomeration and sorting effects are in effect,with the sorting effect accounting for 35％to 55％of the wage premium.For large cities with a population between 1 million and 5 million,the wage premium mainly stems from the sorting effect,with a relatively weaker agglomeration effect.The Dominance Analysis reveals that individual skill contributes most significantly to the wage premium.Furthermore,as the city size increases,there will be a corresponding increase in the workforce's average skill,indicating a clear spatial sorting of labor skills.In megacities,the agglomeration effect primarily arises from dynamic factors,with younger workers experiencing faster wage growth.
The Urban Wage PremiumAgglomeration EffectSorting Effect
NETL
NSTL
万方数据
