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Agglomeration and job matching among college graduates

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 his or her 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.

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Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 587.

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Length: 37 pages
Date of creation: 2012
Date of revision: 01 Dec 2014
Handle: RePEc:fip:fednsr:587
Note: NOTICE: This is the author’s version of a work that was accepted for publication in the journal Regional Science and Urban Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms, may not be reflected in this document. Changes may have been made to this work since it was submitted for publication.
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