IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Survival of the Fittest in Cities: Urbanisation and Inequality

  • Kristian Behrens
  • Frédéric Robert-Nicoud

We develop a framework that integrates natural advantage, agglomeration economies, and firm selection to explain why large cities are both more productive and more unequal than small towns. Our model highlights interesting complementarities among those factors and it matches a number of key stylised facts about cities. A larger city size increases productivity via a selection process, and higher urban productivity provides incentives for rural-urban migration. Tougher selection increases both the returns to skills and earnings inequality in cities. We numerically illustrate a multi-city version of the model and explore the formation of new cities, the growth of existing cities, and changes in income inequality.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.unige.ch/ses/dsec/repec/files/13074.pdf
Download Restriction: no

Paper provided by Institut d'Economie et Econométrie, Université de Genève in its series Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva with number 13074.

as
in new window

Length: 32 pages
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:gen:geneem:13074
Contact details of provider: Postal:
40 Boulevard du Pont-d'Arve, CH-1211 Geneva 4, Switzerland

Phone: +41 22 379 8263
Fax: +41 22 379 82 93
Web page: http://www.unige.ch/gsem/dsec/index.html
Email:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Ottaviano, Gianmarco & Thisse, Jacques-François, 1998. "Agglomeration and Trade Revisited," CEPR Discussion Papers 1903, C.E.P.R. Discussion Papers.
  2. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  3. Stephen J. Redding & Daniel M. Sturm, 2008. "The Costs of Remoteness: Evidence from German Division and Reunification," American Economic Review, American Economic Association, vol. 98(5), pages 1766-97, December.
  4. Hoyt Bleakley & Jeffrey Lin, 2010. "Portage: path dependence and increasing returns in U.S. history," Working Papers 10-27, Federal Reserve Bank of Philadelphia.
  5. Gianmarco I.P. Ottaviano & Gregory Corcos & Massimo Del Gatto & Giordano Mion, 2009. "Productivity and Firm Selection: Quantifying the “New” Gains from Trade," Working Papers 2009.115, Fondazione Eni Enrico Mattei.
  6. Gilles Duranton & Diego Puga, 2000. "Nursery cities: urban diversity, process innovation and the life-cycle of products," LSE Research Online Documents on Economics 20204, London School of Economics and Political Science, LSE Library.
  7. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  8. Shin-Kun Peng & Jacques-François Thisse & Ping Wang, 2005. "Economic Integration and Agglomeration in a Middle Product Economy," IEAS Working Paper : academic research 05-A006, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  9. Moretti, Enrico, 2008. "Real Wage Inequality," CEPR Discussion Papers 6997, C.E.P.R. Discussion Papers.
  10. Glaeser, Edward L. & Kahn, Matthew E. & Rappaport, Jordan, 2008. "Why do the poor live in cities The role of public transportation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 1-24, January.
  11. Duranton, Gilles & Turner, Matthew A, 2008. "Urban Growth and Transportation," CEPR Discussion Papers 6633, C.E.P.R. Discussion Papers.
  12. Marcus Asplund & Volker Nocke, 2006. "Firm Turnover in Imperfectly Competitive Markets -super-1," Review of Economic Studies, Oxford University Press, vol. 73(2), pages 295-327.
  13. Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
  14. Jan Eeckhout & Roberto Pinheiro & Kurt Schmidheiny, 2013. "Spatial sorting," IFS Working Papers W13/18, Institute for Fiscal Studies.
  15. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
  16. Chad Syverson, 2001. "Market Structure and Productivity: A Concrete Example," Working Papers 01-06, Center for Economic Studies, U.S. Census Bureau.
  17. Ottaviano, Gianmarco & Melitz, Marc, 2008. "Market Size, Trade, and Productivity," Scholarly Articles 3229096, Harvard University Department of Economics.
  18. Gilles Duranton & Peter Morrow & Matthew Turner, 2013. "Roads and Trade: Evidence from the U.S," Working Papers tecipa-479, University of Toronto, Department of Economics.
  19. Mark D. Partridge & Dan S. Rickman & Kamar Ali & M. Rose Olfert, 2007. "Do New Economic Geography Agglomeration Shadows Underlie Current Population Dynamics across the Urban Hierarchy?," Economics Working Paper Series 0708, Oklahoma State University, Department of Economics and Legal Studies in Business.
  20. Marius Brülhart & Céline Carrère & Frederico Trionfetti, 2012. "How Wages and Employment Adjust to Trade Liberalization: Quasi-Experimental Evidence from Austria," NRN working papers 2012-02, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  21. Edward L. Glaeser & Matt Resseger & Kristina Tobio, 2009. "Inequality In Cities," Journal of Regional Science, Wiley Blackwell, vol. 49(4), pages 617-646.
  22. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
  23. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity (DOI:10.111/j.1467-937x.2007.00463.x)," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 985-985.
  24. Nathaniel Baum-Snow & Ronni Pavan, 2013. "Inequality and City Size," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1535-1548, December.
  25. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
  26. Wheeler, Christopher H, 2001. "Search, Sorting, and Urban Agglomeration," Journal of Labor Economics, University of Chicago Press, vol. 19(4), pages 879-99, October.
  27. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
  28. Gianmarco I. P. Ottaviano, 2012. "Agglomeration, Trade and Selection," CEP Discussion Papers dp1129, Centre for Economic Performance, LSE.
  29. Lee, Sanghoon, 2010. "Ability sorting and consumer city," Journal of Urban Economics, Elsevier, vol. 68(1), pages 20-33, July.
  30. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  31. Hartmut Egger & Udo Kreickemeier, 2009. "Firm Heterogeneity And The Labor Market Effects Of Trade Liberalization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 187-216, 02.
  32. Claudio Michelacci & Olmo Silva, 2007. "Why So Many Local Entrepreneurs?," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 615-633, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:gen:geneem:13074. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.