Learning By Working In Big Cities
Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages from workers’ current location, and learning by working in bigger cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher initial ability as reflected in fixed effects. Instead, they obtain an immediate static premium and accumulate more valuable experience. The additional value of experience in bigger cities persists after leaving and is stronger for those with higher initial ability. This explains both the higher mean and greater dispersion of earnings in bigger cities.
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- Mion, Giordano & Naticchioni, Paolo, 2007.
"The spatial sorting and matching of skills and firms,"
1721, University Library of Munich, Germany.
- Giordano Mion & Paolo Naticchioni, 2009. "The spatial sorting and matching of skills and firms," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 28-55, February.
- MION, Giordano & NATICCHIONI, Paolo, 2006. "The spatial sorting and matching of skills and firms," CORE Discussion Papers 2006099, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Giordano Mion & Paolo Naticchioni, 2009. "The spatial sorting and matching of skills and firms," LSE Research Online Documents on Economics 42670, London School of Economics and Political Science, LSE Library.
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- Nathaniel Baum-Snow & Ronni Pavan, 2012.
"Understanding the City Size Wage Gap,"
Review of Economic Studies,
Oxford University Press, vol. 79(1), pages 88-127.
- Bacolod, Marigee & Blum, Bernardo S. & Strange, William C., 2009. "Skills in the city," Journal of Urban Economics, Elsevier, vol. 65(2), pages 136-153, March.
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