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The relative importance of portable and non-portable agglomeration effects for the urban wage premium

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  • Frings, Hanna
  • Kamb, Rebecca

Abstract

Using administrative data for West Germany, we study the relative importance of portable and non-portable agglomeration effects for the urban wage premium. In doing so, we advance the established strategy of estimating wage-tenure profiles for urban-rural and rural-urban movers by adding worker, firm, and match fixed effects. This allows us to distinguish unambiguously between both types of agglomeration effects. Our results show that portable and non-portable agglomeration effects equally contribute to the urban wage premium. Moreover, portable agglomeration effects are not only observed in the biggest cities. Instead, the speed of human capital accumulation continuously increases with city size.

Suggested Citation

  • Frings, Hanna & Kamb, Rebecca, 2022. "The relative importance of portable and non-portable agglomeration effects for the urban wage premium," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:regeco:v:95:y:2022:i:c:s0166046222000175
    DOI: 10.1016/j.regsciurbeco.2022.103786
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    More about this item

    Keywords

    Urban wage premium; Agglomeration; Human capital accumulation;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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