Learning By Working In Big Cities
AbstractIndividual 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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Bibliographic InfoPaper provided by CEMFI in its series Working Papers with number wp2013_1301.
Date of creation: Jan 2013
Date of revision:
Learning; city size; earnings premium; agglomeration economies.;
Other versions of this item:
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-08 (All new papers)
- NEP-GEO-2013-02-08 (Economic Geography)
- NEP-LAB-2013-02-08 (Labour Economics)
- NEP-LMA-2013-02-08 (Labor Markets - Supply, Demand, & Wages)
- NEP-URE-2013-02-08 (Urban & Real Estate Economics)
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