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Thick-market effects and churning in the labor market: Evidence from US cities

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  • Bleakley, Hoyt
  • Lin, Jeffrey

Abstract

Workers change occupation and industry less often in more densely populated areas, a relationship that had not been previously reported. This reduced-form result is robust to standard demographic controls, as well as to including aggregate measures of human capital and sectoral mix. Analysis of displaced worker surveys shows that this relationship is present in cases of involuntary separation as well. In contrast, we actually find the opposite result (higher rates of occupational and industrial switching) for the subsample of younger workers. These results provide evidence consistent with increasing-returns-to-scale matching in labor markets. Results from a back-of-the-envelope calibration suggest that this mechanism has an important role in raising both wages and returns to experience in denser areas.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 72 (2012)
Issue (Month): 2 ()
Pages: 87-103

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Handle: RePEc:eee:juecon:v:72:y:2012:i:2:p:87-103

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Agglomeration; Churning; Sector-specific skill;

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References

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Cited by:
  1. Daniel F. Heuermann, 2009. "Career Networks and Job Matching - Evidence on the Microeconomic Foundations of Human Capital Externalities," IAAEG Discussion Papers until 2011 200901, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  2. Mark J. Kutzbach, 2010. "Access to Workers or Employers? An Intra-Urban Analysis of Plant Location Decisions," Working Papers 10-21r, Center for Economic Studies, U.S. Census Bureau, revised Sep 2012.
  3. Moretti, Enrico, 2010. "Local Labor Markets," IZA Discussion Papers 4905, Institute for the Study of Labor (IZA).
  4. Jaison R. Abel & Richard Deitz, 2012. "Agglomeration and job matching among college graduates," Staff Reports 587, Federal Reserve Bank of New York.
  5. Jeffrey Lin, 2011. "Urban productivity advantages from job search and matching," Business Review, Federal Reserve Bank of Philadelphia, issue Q1, pages 9-16.
  6. Thulin, Per, 2009. "Labor Mobility, Knowledge Diffusion And Regional Growth," Working Paper Series in Economics and Institutions of Innovation 209, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  7. Alessandro Gavazza, 2011. "The Role of Trading Frictions in Real Asset Markets," American Economic Review, American Economic Association, vol. 101(4), pages 1106-43, June.
  8. Monica Andini & Guido de Blasio & Gilles Duranton & William C. Strange, 2012. "Marshallian labor market pooling: evidence from Italy," Working Papers 2012/27, Institut d'Economia de Barcelona (IEB).
  9. Gerald A. Carlino, 2011. "Three keys to the city: resources, agglomeration economies, and sorting," Business Review, Federal Reserve Bank of Philadelphia, issue Q3, pages 1-13.

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