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Skill-Biased Agglomeration Effects and Amenities: Theory with an Application to Italian Cities

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  • Alberto Dalmazzo

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  • Guido De Blasio

    ()

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    Abstract

    We provide a spatial equilibrium model with skill heterogeneity and then bring the model to data on workers living in Italian cities. Theoretically, we postulate that agglomeration to affect both production and consumption. Moreover, we allow the evaluation of urban amenities to vary across skill-groups. Empirically, we find evidence of a substantial urban rent premium, while we fail to find support for the urban wage premium. These results apply more dramatically to higheducated individuals, who care about the consumption effects of agglomeration disproportionately more than their lesseducated counterparts. We show that urban skilled workers benefit from jobs of higher quality (better working environment; higher consideration received by others) and valuate amenities more (local public goods, such as transportation, health and schooling services; shopping possibilities, and the cultural consumption potentials made possible by the location of cinemas, theaters, and museums).

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    Bibliographic Info

    Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 503.

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    Date of creation: Apr 2007
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    Handle: RePEc:usi:wpaper:503

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    Keywords: agglomeration; cities.;

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    References

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    1. Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," Harvard Institute of Economic Research Working Papers 2025, Harvard - Institute of Economic Research.
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    8. Hartog,Joop & Maassen van den Brink,Henriëtte (ed.), 2007. "Human Capital," Cambridge Books, Cambridge University Press, number 9780521873161.
    9. Gyourko, Joseph & Kahn, Matthew & Tracy, Joseph, 1999. "Quality of life and environmental comparisons," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 37, pages 1413-1454 Elsevier.
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    24. Dwight W. Adamson & David E. Clark & Mark D. Partridge, 2004. "Do Urban Agglomeration Effects and Household Amenities have a Skill Bias?," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 201-224.
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    Cited by:
    1. Thiess Buettner & Alexander Ebertz, 2009. "Quality of life in the regions: results for German Counties," The Annals of Regional Science, Springer, vol. 43(1), pages 89-112, March.

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