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Abstract

This paper estimates participation and wage equations using panel data from the United Kingdom to explore differences in urban and rural wages and participation by gender. The results suggest a small but economically significant participation premium for urban women relative to rural female workers. Results from the wage estimations suggest that after controlling for sample selectivity, observed and unobserved heterogeneity, the wage premium received by urban women is larger than that obtained by men. Consistent with the hypothesis that poorer matching in less dense labour markets affects rural workers, there is also evidence of higher rural wage depreciation for both men and women, while returns to experience for rural men are also lower than for urban workers.

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