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Heterogeneous Skills and Homogeneous Land: Segmentation and Agglomeration

Author

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  • Matthias Wrede

    (University of Marburg)

Abstract
This paper analyzes the impact of skill heterogeneity on regional patterns of production and housing in the presence of pecuniary externalities within a general-equilibrium framework assuming monopolistic competition at intermediate good markets. It shows that the interplay of heterogeneous skills and relatively homogeneous land demand triggers skill segmentation and agglomeration. The core region, being more attractive to high skilled workers, has a disproportionately large share of production at all levels of the supply chain. The paper studies the effects on segmentation and agglomeration of interregional trade in intermediate goods, attachment to home, the presence of immobile unskilled workers, various conditions at local land markets, and federal taxation.

Suggested Citation

  • Matthias Wrede, 2009. "Heterogeneous Skills and Homogeneous Land: Segmentation and Agglomeration," MAGKS Papers on Economics 200922, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:200922
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    File URL: https://www.uni-marburg.de/en/fb02/research-groups/economics/macroeconomics/research/magks-joint-discussion-papers-in-economics/papers/2009-papers/22-2009_wrede.pdf
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    Cited by:

    1. Behrens, Kristian & Robert-Nicoud, Frédéric, 2015. "Agglomeration Theory with Heterogeneous Agents," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 171-245, Elsevier.
    2. Zheng, Wenbo, 2023. "Land supply and industrial agglomeration: Extension of the new economic geography model with land elements incorporated," Land Use Policy, Elsevier, vol. 132(C).
    3. Matthias Wrede, 2013. "Heterogeneous skills, migration, and commuting," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 345-360, June.
    4. Yiming Zhou, 2019. "Home market effect, land rent, and welfare," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 561-580, June.

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    More about this item

    Keywords

    Skill heterogeneity; land use; segmentation; agglomeration.;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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