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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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Paper provided by CEMFI in its series Working Papers with number wp2013_1301.

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Date of creation: Jan 2013
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Handle: RePEc:cmf:wpaper:wp2013_1301
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  1. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
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  12. Nathaniel Baum-snow & Ronni Pavan, 2009. "Understanding the City Size Wage Gap," 2009 Meeting Papers 524, Society for Economic Dynamics.
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  19. Berry, Christopher R. & Glaeser, Edward L., 2005. "Divergence of Human Capital Levels across Cities," Working Paper Series rwp05-057, Harvard University, John F. Kennedy School of Government.
  20. Christopher R. Berry & Edward L. Glaeser, 2005. "The Divergence of Human Capital Levels Across Cities," NBER Working Papers 11617, National Bureau of Economic Research, Inc.
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  26. repec:oup:restud:v:74:y:2007:i:2:p:477-506 is not listed on IDEAS
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