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Agglomeration and job matching among college graduates

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  • Abel, Jaison R.
  • Deitz, Richard

Abstract

We examine job matching as a potential source of urban agglomeration economies. Focusing on college graduates, we construct two direct measures of job matching based on how well an individual's job corresponds to their college education. Consistent with matching-based theories of urban agglomeration, we find evidence that larger and thicker local labor markets increase both the likelihood and quality of a job match for college graduates. We then assess the extent to which better job matching of college-educated workers increases individual-level wages and thereby contributes to the urban wage premium. We find that college graduates with better job matches do indeed earn higher wages on average, though the contribution of such job matching to aggregate urban productivity appears to be relatively modest.

Suggested Citation

  • Abel, Jaison R. & Deitz, Richard, 2015. "Agglomeration and job matching among college graduates," Regional Science and Urban Economics, Elsevier, vol. 51(C), pages 14-24.
  • Handle: RePEc:eee:regeco:v:51:y:2015:i:c:p:14-24
    DOI: 10.1016/j.regsciurbeco.2014.12.001
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    Cited by:

    1. Jaison R. Abel & Richard Deitz, 2017. "Underemployment in the Early Careers of College Graduates following the Great Recession," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 149-181, National Bureau of Economic Research, Inc.
    2. John V. Winters, 2017. "Do earnings by college major affect graduate migration?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(3), pages 629-649, November.
    3. Edilberto Tiago Almeida & Raul Mota Silveira Neto & Jaime Macedo Brito Bastos & Rubens Lopes Pereira Silva, 2021. "Location patterns of service activities in large metropolitan areas: the Case of São Paulo," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(2), pages 451-481, October.
    4. Yudai Higashi, 2021. "Agglomeration Effects on Job Matching Efficiency: Evidence from Japan," Discussion Paper Series DP2021-03, Research Institute for Economics & Business Administration, Kobe University.
    5. Berlingieri, Francesco, 2015. "Local labour market size and qualification mismatch," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113102, Verein für Socialpolitik / German Economic Association.
    6. Winters, John V., 2014. "STEM graduates, human capital externalities, and wages in the U.S," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 190-198.
    7. Stuart Donovan & Thomas de Graaff & Henri de Groot & Carl Koopmans, 2021. "Unravelling urban advantages - A meta-analysis of agglomeration economies," Tinbergen Institute Discussion Papers 21-026/VIII, Tinbergen Institute.
    8. Francesco Berlingieri, 2019. "Local labor market size and qualification mismatch," Journal of Economic Geography, Oxford University Press, vol. 19(6), pages 1261-1286.
    9. Büchel, Konstantin & Ehrlich, Maximilian v., 2020. "Cities and the structure of social interactions: Evidence from mobile phone data," Journal of Urban Economics, Elsevier, vol. 119(C).
    10. Jaison R. Abel & Todd M. Gabe & Kevin Stolarick, 2014. "Skills across the Urban–Rural Hierarchy," Growth and Change, Wiley Blackwell, vol. 45(4), pages 499-517, December.
    11. Jaison R. Abel & Richard Deitz, 2019. "Why Are Some Places So Much More Unequal Than Others?," Economic Policy Review, Federal Reserve Bank of New York, vol. 25(Dec).
    12. Taelim Choi, 2020. "Agglomeration Effect of Skill-Based Local Labor Pooling: Evidence of South Korea," Sustainability, MDPI, Open Access Journal, vol. 12(8), pages 1-15, April.
    13. Hadavand, Aboozar & Thomas, Sarah M & Almasi, Pooya & Gharehgozli, Orkideh, 2019. "Relevance of Education to Occupation: A New Empirical Approach Based on College Courses," OSF Preprints 8ysgz, Center for Open Science.
    14. Yan, Siqi & Peng, Jianchao & Wu, Qun, 2020. "Exploring the non-linear effects of city size on urban industrial land use efficiency: A spatial econometric analysis of cities in eastern China," Land Use Policy, Elsevier, vol. 99(C).
    15. Manuel Salas-Velasco, 2021. "Mapping the (mis)match of university degrees in the graduate labor market," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-23, December.
    16. Yudai Higashi, 2020. "Urbanization Effects on Job Search Decision," Discussion Paper Series DP2020-26, Research Institute for Economics & Business Administration, Kobe University.
    17. Erdsiek, Daniel, 2017. "Dynamics of overqualification: Evidence from the early career of graduates," ZEW Discussion Papers 17-020, ZEW - Leibniz Centre for European Economic Research.
    18. Cunningham, Chris & Patton, Michaela C. & Reed, Robert R., 2016. "Heterogeneous returns to knowledge exchange: Evidence from the urban wage premium," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 120-139.
    19. Eliasson, Kent & Haapanen, Mika & Westerlund, Olle, 2019. "Regional concentration of university graduates: The role of high school grades and parental background," Umeå Economic Studies 966, Umeå University, Department of Economics.
    20. David Denkenberger & Julia Way & Joshua M. Pearce, 2015. "Educational Pathways to Remote Employment in Isolated Communities," Journal of Human Security, Librello publishing house, vol. 11(1), pages 34-44.
    21. Todd Gabe & Jaison R. Abel & Richard Florida, 2019. "Can Workers in Low-End Occupations Climb the Job Ladder?," Economic Development Quarterly, , vol. 33(2), pages 92-106, May.
    22. Igna, Ioana A., 2018. "The effects of educational mismatch on inventor productivity. Evidence from Sweden, 2003-2010," Papers in Innovation Studies 2018/8, Lund University, CIRCLE - Centre for Innovation Research.
    23. Eliasson, Kent & Westerlund, Olle, 2019. "Graduate migration, self-selection and urban wage premiums across the regional hierarchy," Umeå Economic Studies 962, Umeå University, Department of Economics.
    24. Eugenia Anatolyevna Kolomak, 2018. "Why Cities Emerge and Grow? Explanations of Theoretical and Empirical Studies," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 134-153.
    25. Ransom, Tyler, 2020. "Selective Migration, Occupational Choice, and the Wage Returns to College Majors," IZA Discussion Papers 13370, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Agglomeration; Labor market matching; Productivity; Underemployment; Urban wage premium;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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