ABSTRACT

Utilizing micro-level individual data of Chinese cities across the years 2011, 2013, 2015, 2017, and 2019, this study employs metrics such as population size and personal population density to quantify the phenomenon of urban agglomeration. Its primary focus is to investigate the impact of urban agglomeration on wage levels, along with an exploration of whether the presence of urban rail transit further amplifies this impact, leading to enhanced wage premiums. The findings reveal that urban agglomeration contributes to the wage premium, with its primary effect concentrated in large cities with a permanent urban population of over one million. The introduction of urban rail transit expands the urban agglomeration effect and brings more wage premium. Specifically, the introduction of urban rail transit improves the scale effect of agglomeration and mitigates congestion issues. In addition, the agglomeration effect benefits labor of varying skill levels and genders. These results have implications for policy regarding the optimization of urban spatial structure and enabling urban development through urban rail transit.