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Spatial Sorting

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  • Jan Eeckhout
  • Roberto Pinheiro
  • Kurt Schmidheiny

Abstract

We investigate the role of skill complementarities in production and mobility across cities. The nature of the complementarities determines the equilibrium skill distribution across cities. With extreme-skill complementarity, the skill distribution has thicker tails in large cities; with top-skill complementarity, there is first-order stochastic dominance. Using wage and housing price data, we find robust evidence of thick tails in large cities: large cities disproportionately attract both high- and low-skilled workers, while average skills are constant across city size. This pattern of spatial sorting is consistent with extreme-skill complementarity, where the productivity of high-skilled workers and of the providers of low-skilled services are mutually enhanced.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 122 (2014)
Issue (Month): 3 ()
Pages: 554 - 620

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Handle: RePEc:ucp:jpolec:doi:10.1086/676141

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Web page: http://www.journals.uchicago.edu/JPE/

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References

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Cited by:
  1. Alberto Dalmazzo & Antonio Accetturo & Guido de Blasio, 2012. "Skill Polarization in Local Labour Markets under Share-Altering Technical Change," ERSA conference papers ersa12p288, European Regional Science Association.
  2. Giulio Cainelli & Sandro Montresor & Giuseppi Vittucci Marzetti, 2013. "Spatial agglomeration and firm exit: a spatial dynamic analysis for Italian provinces," "Marco Fanno" Working Papers 0173, Dipartimento di Scienze Economiche "Marco Fanno".
  3. Marko Koethenbuerger, 2012. "Competition for Migrants in a Federation: Tax or Transfer Competition?," EPRU Working Paper Series 2012-01, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  4. Behrens, Kristian & Pokrovsky, Dmitry & Zhelobodko, Evgeny, 2014. "Market Size, Entrepreneurship, and Income Inequality," CEPR Discussion Papers 9831, C.E.P.R. Discussion Papers.
  5. Suzanne Kok, 2013. "Town and city jobs: Your job is different in another location," CPB Discussion Paper 246, CPB Netherlands Bureau for Economic Policy Analysis.
  6. Rafael Alvarado & Miguel Atienza, 2014. "The role of market access and human capital in regional wage disparities: Empirical evidence for Ecuador," Documentos de Trabajo en Economia y Ciencia Regional 52, Universidad Catolica del Norte, Chile, Department of Economics, revised Mar 2014.

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