A better life away from the big cities: The premium for less densely populated areas
Fleckinger, Pierre
A better life away from the big cities: The premium for less densely populated areas - 2025.
26
This article studies the attractiveness of French regions and their industrial firms for employees. While salaries are strongly correlated with density, we demonstrate the existence of a real estate purchasing power premium that compensates for a decrease in population density and associated positive externalities. This premium, measured as a reduction in the time required to access homeownership, (i) increases when density decreases and (ii) is proportionally higher for managers than for less skilled occupations. The empirical model uses firm level fixed effects and controls for a wide range of individual, establishment, and regional characteristics, utilizing all employment contracts signed in French manufacturing establishments in 2019. The endogeneity of density is addressed by using historical density as an instrumental variable. The results suggest various avenues for further analysis to understand the strong wage heterogeneity between occupations and regions. JEL Codes: J31, R30, O18, O14
A better life away from the big cities: The premium for less densely populated areas - 2025.
26
This article studies the attractiveness of French regions and their industrial firms for employees. While salaries are strongly correlated with density, we demonstrate the existence of a real estate purchasing power premium that compensates for a decrease in population density and associated positive externalities. This premium, measured as a reduction in the time required to access homeownership, (i) increases when density decreases and (ii) is proportionally higher for managers than for less skilled occupations. The empirical model uses firm level fixed effects and controls for a wide range of individual, establishment, and regional characteristics, utilizing all employment contracts signed in French manufacturing establishments in 2019. The endogeneity of density is addressed by using historical density as an instrumental variable. The results suggest various avenues for further analysis to understand the strong wage heterogeneity between occupations and regions. JEL Codes: J31, R30, O18, O14
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