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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- 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.
- 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, 2007. "The spatial sorting and matching of skills and firms," MPRA Paper 1721, University Library of Munich, Germany.
- 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).
- Nathaniel Baum-snow & Ronni Pavan, 2009.
"Understanding the City Size Wage Gap,"
2009 Meeting Papers
524, Society for Economic Dynamics.
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- Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-75, April.
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