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Why do Older Cities Promise Lower Wages in Russia?

Student: Konstantin Seryy

Supervisor: Alexander Skorobogatov

Faculty: St.Petersburg School of Economics and Management

Educational Programme: Economics (Bachelor)

Year of Graduation: 2021

This research paper explains the negative link between wages of cities and their age in Russia from the old cities side. To highlight the mechanisms behind this connection we apply the extended version of Glaeser and Gottlieb spatial equilibrium model to interpret our regression results. We conclude that older cities tend to locate in regions with higher agricultural potential. The change of industry specialization during the Soviet period is a key factor that caused a decline in production and a decrease in relative wages in old cities specializing in the food industry during the time of the Russian Empire.

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