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Productivity in cities: self-selection and sorting

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  • Anthony J. Venables

Abstract

Productivity is high in cities partly because the urban environment acts as a self-selection mechanism. If workers have imperfect information about the quality of workers with whom they match and matches take place within cities, then high-ability workers will choose to live and work in expensive cities. This self-selection improves the quality of matches in such cities. The mechanism may be reinforced by the development of informational networks in cities with a large proportion of high ability workers. As a consequence productivity in these cities is high for workers of all ability types.

Suggested Citation

  • Anthony J. Venables, 2010. "Productivity in cities: self-selection and sorting," Economics Series Working Papers 507, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:507
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    File URL: http://www.economics.ox.ac.uk/materials/papers/4625/paper507.pdf
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    References listed on IDEAS

    as
    1. Amiti, Mary & Pissarides, Christopher A., 2005. "Trade and industrial location with heterogeneous labor," Journal of International Economics, Elsevier, vol. 67(2), pages 392-412, December.
    2. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
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    More about this item

    Keywords

    economic geography; productivity; city; urban; sorting; self-selection;

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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