What drives the spatial wage premium for formal and informal workers? The case of Ecuador
This article investigates the incidence of agglomeration
externalities in Ecuador, a small‐sized, middle‐income
developing country. In particular, we analyze the role of
the informal sector within these relations, since informal
employment accounts for a significant part of total employment
in the developing countries. Using individual level data
and instrumental variable techniques, we investigate the
impact of spatial externalities, in terms of population density,
local specialization and urban size, on the wages of workers