JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Workers in cities earn 33% more than their nonurban counterparts. A large amount of evidence suggests that this premium is not just the result of higher ability workers living in cities, which means that cities make workers more productive. Evidence on migrants and the cross effect between urban status and experience implies that a significant fraction of the urban wage premium accrues to workers over time and stays with them when they leave cities. Therefore, a portion of the urban wage premium is a wage growth, not a wage level, effect. This evidence suggests that cities speed the accumulation of human capital.
The availability of tax-based payroll data has proved a blessing to labour and business economists wishing to understand workers, their jobs and their employers. Unfortunately, administrative data do not always include key variables of interest. In the case of New Zealand, linked employer-employee data do not include any information on hours worked. We implement a set of complementary methods to patch this gap, deriving an approximate measure of full-time equivalent labour input. In addition, and more specific to the New Zealand data environment, we describe a method for identifying working proprietors using annual tax-filed information, thus providing a more complete picture of total firm labour input.
JEL codes
D22; L11; Q54
KeywordsLinked employer-employee tax data; measuring labour input; full-time equivalent; working proprietors 7
This paper analyses income distribution changes in New Zealand between 1983 and 1998. We use a semi-parametric kernel density approach and a range of inequality summary measures to assess the distributional effects of changes in five sets of factors: household structure, National Superannuation (old age pension), socio-demographic attributes, employment outcomes, and 'economic returns' to such attributes and employment outcomes. Changes in household structure and attributes are the main factors contributing to the rise in inequality. Employment changes and changing returns had a more modest impact. The results are qualitatively robust to a variety of equivalization, income, and weighting measures. Copyright (c) The London School of Economics and Political Science 2005.
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