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Is the division of labour limited by the extent of the market? Evidence from French cities

Listed author(s):
  • Duranton, Gilles
  • Jayet, Hubert

This paper provides supportive evidence to the notion that the division of labour is limited by the extent of the (local) market. We first propose a theoretical model. Its main prediction is that scarce specialists occupations are over-represented in large cities. Using census data for French cities, we find strong empirical support for this prediction.

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File URL: http://www.sciencedirect.com/science/article/pii/S0094-1190(10)00052-5
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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 69 (2011)
Issue (Month): 1 (January)
Pages: 56-71

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Handle: RePEc:eee:juecon:v:69:y:2011:i:1:p:56-71
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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  1. Matouschek, Niko & Robert-Nicoud, Frederic, 2005. "The role of human capital investments in the location decision of firms," Regional Science and Urban Economics, Elsevier, vol. 35(5), pages 570-583, September.
  2. Thomas J. Holmes, 1999. "Localization Of Industry And Vertical Disintegration," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 314-325, May.
  3. Duranton, Gilles & Puga, Diego, 2000. "Nursery Cities: Urban Diversity, Process Innovation, and the Life-Cycle of Products," CEPR Discussion Papers 2376, C.E.P.R. Discussion Papers.
  4. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
  5. Gilles Duranton & Diego Puga, 2001. "From sectoral to functional urban specialisation," LSE Research Online Documents on Economics 20101, London School of Economics and Political Science, LSE Library.
  6. Moretti, Enrico, 2010. "Local Labor Markets," CEPR Discussion Papers 7818, C.E.P.R. Discussion Papers.
  7. Tomoya Mori & Koji Nishikimi & Tony E. Smith, 2004. "A Divergence Statistic for Industrial Localization," KIER Working Papers 587, Kyoto University, Institute of Economic Research.
  8. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
  9. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  10. Duranton, Gilles & Puga, Diego, 2003. "Microfoundations of Urban Agglomeration Economies," CEPR Discussion Papers 4062, C.E.P.R. Discussion Papers.
  11. Guy Michaels, 2007. "The division of labor, coordination, and the demand for information processing," LSE Research Online Documents on Economics 51600, London School of Economics and Political Science, LSE Library.
  12. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
  13. Gary S. Murphy Becker & Kevin M., 1992. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - George G. Stigler Center for Study of Economy and State 79, Chicago - Center for Study of Economy and State.
  14. Henderson, Vernon, 1997. "Medium size cities," Regional Science and Urban Economics, Elsevier, vol. 27(6), pages 583-612, November.
  15. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  16. Helsley, Robert W. & Strange, William C., 1990. "Matching and agglomeration economies in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 189-212, September.
  17. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2013. "Productive cities: Sorting, selection, and agglomeration," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 13111, Institut d'Economie et Econométrie, Université de Genève.
  18. Helsley, Robert W. & Strange, William C., 2007. "Agglomeration, opportunism, and the organization of production," Journal of Urban Economics, Elsevier, vol. 62(1), pages 55-75, July.
  19. Coles, Melvyn G & Smith, Eric, 1998. "Marketplaces and Matching," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 239-254, February.
  20. Garicano, Luis & Hubbard, Thomas, 2003. "Specialization, Firms and Markets: The division of Labour Between and Within Law Firms," CEPR Discussion Papers 3699, C.E.P.R. Discussion Papers.
  21. Baumgardner, James R, 1988. "Physicians' Services and the Division of Labor across Local Markets," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 948-982, October.
  22. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185-185.
  23. Baumgardner, James R, 1988. "The Division of Labor, Local Markets, and Worker Organization," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 509-527, June.
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