Abstract
AbstractThis paper estimates the effect of transport network improvements on wage earnings using municipality‐level data from Norway. Transport improvements are modelled to impact labour productivity, and thereby wages, through effective employment density by using travel time changes in the Norwegian road network from 2005 to 2009. Identification is achieved by using panel data estimation and by isolating the effects on employment density from those caused by transport improvements. The estimation results indicate agglomeration elasticities in the range of 0.04–0.06. The result lies in the midrange of current estimates and supports the notion that agglomeration economies in a low‐density country such as Norway are not very different from those of more densely populated countries.
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