The systemic reversal of fortune among Russian cities: an impact of natural resource endowments on inter-city gaps in average wage
In this paper we document the negative link between cities' age and their average wage in Russian dataset. This link is persistent after control-ling for geographical, demographic, economic, and environmental factors as well as for various years. This link is revealed especially for cities founded after the Soviet industrialization and for upper quantiles of cities by their average wages. The established fact is used for discussion of a number of hy-potheses as to spatial patterns of economic performance. It weighs against the increasing return hypothesis, in-stitutional hypoth-esis and simple geographical hypothesis. At the same time, it is basi-cally in line with the so-phisticated geographical hypothesis. Specically, changing spatial patterns of wage dierentials are explained by changing importance of natural resources and their proven deposits.