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Learning By Working In Big Cities

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Author Info

  • Jorge De la Roca

    ()
    (New York University)

  • Diego Puga

    ()
    (CEMFI, Centro de Estudios Monetarios y Financieros)

Abstract

Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages from workers’ current location, and learning by working in bigger cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher initial ability as reflected in fixed effects. Instead, they obtain an immediate static premium and accumulate more valuable experience. The additional value of experience in bigger cities persists after leaving and is stronger for those with higher initial ability. This explains both the higher mean and greater dispersion of earnings in bigger cities.

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File URL: http://www.cemfi.es/ftp/wp/1301.pdf
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Bibliographic Info

Paper provided by CEMFI in its series Working Papers with number wp2013_1301.

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Date of creation: Jan 2013
Date of revision:
Handle: RePEc:cmf:wpaper:wp2013_1301

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Related research

Keywords: Learning; city size; earnings premium; agglomeration economies.;

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References

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  1. Nathaniel Baum-Snow & Ronni Pavan, 2012. "Understanding the City Size Wage Gap," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 88-127.
  2. Giordano Mion & Paolo Naticchioni, 2009. "The spatial sorting and matching of skills and firms," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 28-55, February.
  3. Bacolod, Marigee & Blum, Bernardo S. & Strange, William C., 2009. "Skills in the city," Journal of Urban Economics, Elsevier, vol. 65(2), pages 136-153, March.
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Cited by:
  1. Gilles Duranton & Diego Puga, 2013. "The Growth Of Cities," Working Papers wp2013_1308, CEMFI.
  2. Tony Champion & Mike Coombes & Ian Gordon, 2013. "Urban Escalators and Inter-regional Elevators: The Difference that Location, Mobility and Sectoral Specialisation make to Occupational Progression," SERC Discussion Papers 0139, Spatial Economics Research Centre, LSE.

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