The Return to Big City Experience: Evidence from Danish Refugees

Fabian Eckert, Mads Hejlesen and Conor Walsh

No 24, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We offer causal evidence of higher returns to experience in big cities. Exploiting a natural experiment that settled political refugees across labor markets in Denmark between 1986 and 1998, we find that while refugees initially earn similar wages across locations, those placed in Copenhagen exhibit 35% faster wage growth with each additional year of experience. This gap is driven primarily by differential sorting towards high-wage establishments, occupations, and industries. An estimated spatial model of earnings dynamics attributes an important role to unobserved worker ability: more able refugees transition to more productive establishments faster in Copenhagen than in other cities.

Keywords: Agglomeration economies; Urban; Regional labor markets; Resettlement; Wage differentials (search for similar items in EconPapers)
JEL-codes: J31 J61 R11 R12 R23 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2019-08-13
New Economics Papers: this item is included in nep-geo, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: The Return to Big City Experience: Evidence from Danish Refugees (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:0024

DOI: 10.21034/iwp.24

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