Post by ehsanulh125 on Jan 9, 2024 7:14:14 GMT
In the second half of January, the Hungarian press reported thata person from Budapest earns almost twice as much as a person from Szabolc. Although the KSH figures really show that there is a huge difference in economic development between the individual regions of the country, it is worth examining the question in a little more detail: is the inequality really so great within Hungary? Naturally, the topic is much more complex, so that a clear decision can be made by measuring a single indicator. In Hungarian statistics, part of the disadvantage of the county regions (compared to the capital city) can be definitely explained by the urban wage premium , which has been known and researched for almost 20 years.
The phenomenon was presented in Country Email List scientific detail for the first time during a 2006 study: a linear regression model was used to examine the relationship between type of residence and salary (Yankow, 2006). Based on the results, an identical job offered an average 19 percent higher salary if the place of work was in or around a big city. According to the article, much of the 19 percent difference can be explained by the fact that larger cities attract more educated and better-skilled people. However, this difference has not only economic but also demographic consequences (and reasons). Just think about it: if more people live in a certain city (and its surroundings), then a certain job will be available to more people. If the workplace can choose from several applicants, it is more likely to find a candidate with better skills. A candidate with better skills creates more added value, which is then reflected in salaries.
Higher salaries then attract even more (and even better) skilled workers, and so the "circle" starts again. The demographic process of mobility within the country and the differences arising from economic opportunities interact as a self-stimulating process, as a result of which it can be observed all over the world that both labor and capital are concentrated in large cities. Although the effects and sustainability of the phenomenon are still surrounded by scientific debate (according to some research, the bigger the city, the higher the salary, and at the same time inequality in society increases), but no one disputes its existence (Shutters et al., 2022). At the same time, this 19 percent urban wage premium does not provide a complete explanation for the KSH data, since the average net salary in more than half of the counties does not even reach 70 percent of the Budapest average.
The phenomenon was presented in Country Email List scientific detail for the first time during a 2006 study: a linear regression model was used to examine the relationship between type of residence and salary (Yankow, 2006). Based on the results, an identical job offered an average 19 percent higher salary if the place of work was in or around a big city. According to the article, much of the 19 percent difference can be explained by the fact that larger cities attract more educated and better-skilled people. However, this difference has not only economic but also demographic consequences (and reasons). Just think about it: if more people live in a certain city (and its surroundings), then a certain job will be available to more people. If the workplace can choose from several applicants, it is more likely to find a candidate with better skills. A candidate with better skills creates more added value, which is then reflected in salaries.
Higher salaries then attract even more (and even better) skilled workers, and so the "circle" starts again. The demographic process of mobility within the country and the differences arising from economic opportunities interact as a self-stimulating process, as a result of which it can be observed all over the world that both labor and capital are concentrated in large cities. Although the effects and sustainability of the phenomenon are still surrounded by scientific debate (according to some research, the bigger the city, the higher the salary, and at the same time inequality in society increases), but no one disputes its existence (Shutters et al., 2022). At the same time, this 19 percent urban wage premium does not provide a complete explanation for the KSH data, since the average net salary in more than half of the counties does not even reach 70 percent of the Budapest average.