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Thick-market effects and churning in the labor market: evidence from U.S. cities

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  • Hoyt Bleakley
  • Jeffrey Lin

Abstract

Using U.S. Census microdata, the authors show that, on average, workers change occupation and industry less in more densely populated areas. The result is robust to standard demographic controls, as well as to including aggregate measures of human capital and sectoral mix. Analysis of the displaced worker surveys shows that this effect is present in cases of involuntary separation as well. On the other hand, the authors actually find the opposite result (higher rates of occupational and industrial switching) for the subsample of younger workers. These results provide evidence in favor of 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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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 07-23.

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Date of creation: 2007
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Handle: RePEc:fip:fedpwp:07-23

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Keywords: Labor market;

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Citations

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Cited by:
  1. Moretti, Enrico, 2010. "Local Labor Markets," CEPR Discussion Papers 7818, C.E.P.R. Discussion Papers.
  2. 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).
  3. Monica Andini & Guido de Blasio & Gilles Duranton & William Strange, 2012. "Marshallian Labor Market Pooling: Evidence from Italy," ERSA conference papers ersa12p467, European Regional Science Association.
  4. Gavazza, Alessandro, 2010. "The role of trading frictions in real asset markets," MPRA Paper 25781, University Library of Munich, Germany.
  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. 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.
  7. Jaison R. Abel & Richard Deitz, 2012. "Agglomeration and job matching among college graduates," Staff Reports 587, Federal Reserve Bank of New York.
  8. 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.
  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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