The comparative advantage of cities

Donald R. Davis and Jonathan Dingel

Journal of International Economics, 2020, vol. 123, issue C

Abstract: What determines the distributions of skills, occupations, and industries across cities? We develop a theory to jointly address these fundamental questions about the spatial organization of economies. Our model incorporates a system of cities, their internal urban structures, and a high-dimensional theory of factor-driven comparative advantage. It predicts that larger cities will be skill-abundant and specialize in skill-intensive activities according to the monotone likelihood ratio property. We test the model using data on 270 US metropolitan areas, 3 to 9 educational categories, 22 occupations, and 19 industries. The results provide support for our theory's predictions.

Keywords: Agglomeration; Assignment models; Cities; Comparative advantage (search for similar items in EconPapers)
JEL-codes: F11 F14 R12 R13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Related works:
Working Paper: The Comparative Advantage of Cities (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:123:y:2020:i:c:s0022199620300106

DOI: 10.1016/j.jinteco.2020.103291

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