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The Return to Big City Experience: Evidence from Danish Refugees

Author

Listed:
  • Fabian Eckert

    (Yale University)

  • Conor Walsh

    (Yale University)

  • Mads Hejlesen

    (Aarhus University)

Abstract

Using a random settlement policy for refugees in Denmark between 1986-1998, we provide evidence for steeper returns to experience in big cities. Exploiting exogenous variation in initial placement, we show that the slope of an individual’s lifetime wage path depends strongly on placement in the country’s capital, Copenhagen. Conditional on observables, settled refugees initially earn similar hourly wages across regions, but those placed in Copenhagen see their wages grow 0.63% faster than others with each year of experience they accumulate. We further show that this premium is driven by greater acquisition of experience at high-wage establishments, and differential sorting across occupations. Finally, to account for dynamic selection within the city, we develop and estimate a structural model of earnings dynamics.

Suggested Citation

  • Fabian Eckert & Conor Walsh & Mads Hejlesen, 2018. "The Return to Big City Experience: Evidence from Danish Refugees," 2018 Meeting Papers 1214, Society for Economic Dynamics.
  • Handle: RePEc:red:sed018:1214
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    References listed on IDEAS

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    Cited by:

    1. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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