IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2510.22294.html

There's Nothing in the Air

Author

Listed:
  • Jacob Adenbaum

    (CUNEF Universidad)

  • Fil Babalievsky

    (Census Bureau)

  • William Jungerman

    (UNC Chapel Hill)

Abstract

Why do wages grow faster in bigger cities? We use French administrative data to decompose the urban wage growth premium and find that the answer has surprisingly little to do with cities themselves. While we document substantially faster wage growth in larger cities, 80% of the premium disappears after controlling for the composition of firms and coworkers. We also document significantly higher job-to-job transition rates in larger cities, suggesting workers climb the job ladder faster. Most strikingly, when we focus on workers who remain in the same job -- eliminating the job ladder mechanism -- the urban wage growth premium falls by 94.1% after accounting for firms and coworkers. The residual effect is statistically indistinguishable from zero. These results challenge the view that cities generate human capital spillovers ``in the air,'' suggesting instead that urban wage dynamics reflect the sorting of firms and workers and the pace of job mobility.

Suggested Citation

  • Jacob Adenbaum & Fil Babalievsky & William Jungerman, 2025. "There's Nothing in the Air," Papers 2510.22294, arXiv.org.
    • Handle: RePEc:arx:papers:2510.22294
    as

    Download full text from publisher

    File URL: https://arxiv.org/pdf/2510.22294
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eckert, Fabian & Hejlesen, Mads & Walsh, Conor, 2022. "The return to big-city experience: Evidence from refugees in Denmark," Journal of Urban Economics, Elsevier, vol. 130(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sitian Liu & Yichen Su, 2026. "The Geography of Research: The Trade-Off Between Knowledge Production and Access," Papers 2608.15981, arXiv.org.
    2. Di Giacomo, Marina & Perucca, Giovanni & Piacenza, Massimiliano & Turati, Gilberto, 2024. "Immigrants' clusters and unequal access to healthcare treatments," Regional Science and Urban Economics, Elsevier, vol. 109(C).
    3. repec:osf:socarx:nkydt_v1 is not listed on IDEAS
    4. Aksoy, Cevat Giray & Poutvaara, Panu & Schikora, Felicitas, 2023. "First time around: Local conditions and multi-dimensional integration of refugees," Journal of Urban Economics, Elsevier, vol. 137(C).
    5. Acosta, Camilo & Lyngemark, Ditte Håkonsson, 2025. "Spatial wage differentials, geographic frictions and the organization of labor within firms," Regional Science and Urban Economics, Elsevier, vol. 114(C).
    6. Schmandt, Marco & Tielkes, Constantin & Weinhardt, Felix, 2025. "Random Placement but Real Bias," IZA Discussion Papers 18319, IZA Network @ LISER.
    7. Hasager, Linea & Jørgensen, Mia, 2026. "Sick of your poor neighborhood? Quasi-experimental evidence on neighborhood effects on health," Journal of Public Economics, Elsevier, vol. 256(C).
    8. Cole, Matt & Koster, Hans & Ozgen, Ceren & Yumoto, Hiromi, 2026. "Invisible Immigrants? Urbanisation, Co-National Density and the Legal Integration of Refugees," IZA Discussion Papers 18590, IZA Network @ LISER.
    9. repec:osf:socarx:wnd8t_v1 is not listed on IDEAS
    10. Riga Qi, 2025. "Destroy and Build? Economic Effects of Centres de Regroupement in the Algerian War," CERGE-EI Working Papers wp806, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    11. Sarzin, Zara Inga, 2025. "Advancing the Jobs Agenda : Toward Self-Reliance in Refugee Situations," Policy Research Working Paper Series 11246, The World Bank.
    12. Liu, Crocker H. & Rosenthal, Stuart S. & Strange, William C., 2024. "Agglomeration Economies and the Built Environment: Evidence from Specialized Buildings and Anchor Tenants," Journal of Urban Economics, Elsevier, vol. 142(C).
    13. Liu, Sitian & Su, Yichen, 2022. "The Effect of Working from Home on the Agglomeration Economies of Cities: Evidence from Advertised Wages," MPRA Paper 113108, University Library of Munich, Germany.
    14. Atabay, Zeynep & Åslund, Olof, 2026. "Rewarding experiences? - Immigrant wage returns to host country employment," Working Paper Series 2026:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    15. Perl, Maximilian, 2023. "Agglomerations, tasks and wage growth," Ruhr Economic Papers 999, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Jales, Hugo & Jiang, Boqian & Rosenthal, Stuart S., 2023. "JUE Insight: Using the mode to test for selection in city size wage premia," Journal of Urban Economics, Elsevier, vol. 133(C).
    17. Cox, Gary W. & Figueroa, Valentin, 2025. "Agglomeration and creativity in early modern Britain," Explorations in Economic History, Elsevier, vol. 95(C).
    18. Xing, Chunbing & Yuan, Xiaoyan & Zhang, Junfu, 2022. "City size, family migration, and gender wage gap: Evidence from rural–urban migrants in China," Regional Science and Urban Economics, Elsevier, vol. 97(C).
    19. Dauth, Wolfgang & Mense, Andreas & Wrede, Matthias, 2024. "Affordable Housing and Individual Labor Market Outcomes," IZA Discussion Papers 17359, IZA Network @ LISER.
    20. Dylan S Connor & Aleksander K BergArizona & Tom Kemeny & Peter J Kedron, 2024. "Who gets left behind by left behind places?," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 17(1), pages 37-58.
    21. Niebuhr, Annekatrin & Peters, Jan Cornelius & Roth, Duncan H.W., 2024. "Dynamic agglomeration effects of foreigners and natives – The role of experience in high-quality sectors, tasks and establishments," Regional Science and Urban Economics, Elsevier, vol. 108(C).
    22. Ozgen, Ceren & Cole, Matthew A. & Jabbour, Liza & Yumoto, Hiromi, 2024. "Refugees' Economic Integration and Firms," IZA Discussion Papers 16828, IZA Network @ LISER.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2510.22294. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: https://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.