City Air or City Markets: Productivity Gains in Urban Areas

Douglas Krupka

No 3230, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Persistent productivity gains to rural-urban migrants have been documented by a number of researchers. One interpretation of this result is that individuals learn higher value skills in cities than they would have learned in less dense areas. Another explanation for this result, however, is that thicker urban labor markets allow for better matches, which are realized slowly through a process of subsequent job searches. Surprisingly, there has been no empirical test of these two interpretations to this date. This paper uses NLSY79 geocode data to assess whether wage growth of urban workers is due primarily to time spent in the urban environment (and thus learning), or job changes. The evidence suggests that both these processes are probably at work.

Keywords: productivity; agglomeration economies; urban wage premium; matching; learning (search for similar items in EconPapers)
JEL-codes: J24 J31 J61 R11 R23 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2007-12
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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