The Impact of Urban Density on Labour Productivity: Empirical Evidence from Thailand’s Major Cities
Urban density in Thailand’s major cities—Bangkok, Chiang Mai, Khon Kaen, and Songkla—is closely linked to higher labour productivity, with a 1% increase in density associated with an 8.9% rise in hourly wages due to factors such as agglomeration economies, knowledge spillovers, and improved access to skilled labour. Analysis of geocoded household data shows that education is a key driver, with each additional year correlating to an 8.2% wage increase, while skilled workers in dense areas experience wage gains of up to 15.2%, compared to just 1.8% for unskilled workers. A persistent gender wage gap of 5.83% in favour of men is also observed. These insights underscore the economic value of dense urban environments and point to the importance of targeted investments in urban planning, infrastructure, and education to enhance productivity and economic growth.