Chomitz, Kenneth M.da Mata, Danielde Carvalho, Alexandre YwataMagalhães, João Carlos2012-06-202012-06-202005-10https://hdl.handle.net/10986/8527There was substantial spatial variation in labor market outcomes in Brazil over the 1990s. In 2000, about one-fifth of workers lived in apparently economically stagnant municipios where real wages declined but employment increased faster than the national population growth rate. More than one-third lived in apparently dynamic municipios, experiencing both real wage growth and faster-than-average employment growth. These areas absorbed more than half of net employment growth over the period. To elucidate this spatial variation, the authors estimate spatial labor supply and demand equations describing wage and employment changes of Brazilian municipios. They use Conley's spatial GMM technique to allow for instrumental variable estimation in the presence of spatially autocorrelated errors. The main findings include: (1) a very strong influence of initial workforce educational levels on subsequent wage growth (controlling for possibly confounding variables such as remoteness and climate); (2) evidence of positive spillover effects of own-municipio growth onto neighbors' wage and employment levels; (3) an exodus from farming areas; (4) relatively elastic response of wages to an increase in labor supply; and (5) evidence of a local multiplier effect from government transfers.CC BY 3.0 IGOACCELERATORACCELERATOR EFFECTAGRICULTUREASSETSBASIC EDUCATIONCAPITAL INVESTMENTCAPITAL STOCKCAPITAL THEORYCITIESCOST OF LIVINGDEMAND CURVEDEMAND ELASTICITYDETERMINANTS OF GROWTHDEVELOPING COUNTRIESDEVELOPMENT BANKSDEVELOPMENT POLICIESDEVELOPMENT PROJECTSDEVELOPMENT RESEARCHDEVELOPMENT STRATEGIESDISPLACEMENTECONOMETRICSECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC RESEARCHECONOMIC STAGNATIONECONOMICSEDUCATIONAL LEVELEDUCATIONAL LEVELSELASTICITYEMPLOYMENTEMPLOYMENT GROWTHEMPLOYMENT GROWTH RATESEMPLOYMENT LEVELSENDOGENOUS VARIABLEENDOGENOUS VARIABLESESTIMATED COEFFICIENTEXPLANATORY VARIABLESFEMALE LABORFEMALE LABOR FORCEGDPGDP PER CAPITAGROWTH MODELSGROWTH PROSPECTSGROWTH RATEGROWTH REGRESSIONSHOUSEHOLD INCOMEHOUSEHOLD SURVEYHUMAN CAPITALHUMAN DEVELOPMENTINCOME GROWTHINCOME INEQUALITYINCOME LEVELSINCOME PER CAPITAINCREASE IN LABORINCREASING RETURNSINFLATIONJOBSLABOR DEMANDLABOR FORCELABOR FORCE GROWTHLABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKET OUTCOMESLABOR MARKETSLABOR MOBILITYLABOR MOVEMENTSLABOR SUPPLYLOCAL FIRMSLOCAL GOVERNMENTLONG-RUN GROWTHMARGINAL PRODUCTMEAN INCOMEMEAN INCOMESMETROPOLITAN AREASMIGRATIONMONETARY ECONOMICSMULTIPLIER EFFECTMULTIPLIER EFFECTSMUNICIPALITIESNATURAL RESOURCESNEGATIVE EFFECTNET EMPLOYMENTPENSIONSPER CAPITA INCOMEPER CAPITA INCOME LEVELSPER CAPITA INCOMESPOLICY INTERVENTIONSPOLICY RESEARCHPOLITICAL ECONOMYPOOR PEOPLEPRICE INDEXESPRICE LEVELSPRODUCTION FUNCTIONPRODUCTIVITYPRODUCTIVITY GROWTHRAPID GROWTHREAL WAGEREAL WAGESREGIONAL INEQUALITIESREGIONAL INEQUALITYRURAL EMPLOYMENTSIGNIFICANT IMPACTSTANDARD DEVIATIONTAX SUBSIDIESTECHNOLOGICAL CHANGETRANSPORTURBAN AREASWAGE GROWTHWAGE INEQUALITYWAGE LEVELWAGE LEVELSWAGE RATEWEALTHWORKERWORKERSWorld Bank10.1596/1813-9450-3752