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Agglomeration and job matching among college graduates

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Abstract

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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  • Abel, Jaison R. & Deitz, Richard, 2012. "Agglomeration and job matching among college graduates," Staff Reports 587, Federal Reserve Bank of New York, revised 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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    Citations

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    Cited by:

    1. Jaison R. Abel & Richard Deitz, 2017. "Underemployment in the Early Careers of College Graduates Following the Great Recession," NBER Chapters,in: Education, Skills, and Technical Change: Implications for Future US GDP Growth National Bureau of Economic Research, Inc.
    2. Konstantin Büchel und Maximilian von Ehrlich, 2016. "Cities and the Structure of Social Interactions: Evidence from Mobile Phone Data," Diskussionsschriften dp1608, Universitaet Bern, Departement Volkswirtschaft.
    3. John V. Winters, 2017. "Do earnings by college major affect graduate migration?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(3), pages 629-649, November.
    4. Brahim Boualam, 2014. "Getting a First Job: Quality of the Labor Matching in French Cities," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 14094, Institut d'Economie et Econométrie, Université de Genève.
    5. Erdsiek, Daniel, 2017. "Dynamics of overqualification: Evidence from the early career of graduates," ZEW Discussion Papers 17-020, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Cunningham, Chris & Patton, Michaela C. & Reed, Robert R., 2016. "Heterogeneous returns to knowledge exchange: Evidence from the urban wage premium," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 120-139.
    7. Berlingieri, Francesco, 2015. "Local labour market size and qualification mismatch," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113102, Verein für Socialpolitik / German Economic Association.
    8. David Denkenberger & Julia Way & Joshua M. Pearce, 2015. "Educational Pathways to Remote Employment in Isolated Communities," Journal of Human Security, Librello publishing house, vol. 11(1), pages 34-44.
    9. Winters, John V., 2014. "STEM graduates, human capital externalities, and wages in the U.S," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 190-198.
    10. Berlingieri, Francesco, 2017. "Local labor market size and qualification mismatch," ZEW Discussion Papers 17-055, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item

    Keywords

    agglomeration; labor market matching; productivity; underemployment; urban wage premium;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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