Cognitive Hubs and Spatial Redistribution

Esteban Rossi-Hansberg, Pierre-Daniel Sarte and Felipe Schwartzman

American Economic Journal: Macroeconomics, 2026, vol. 18, issue 2, 72-111

Abstract: In the United States, cognitive nonroutine (CNR) occupations are disproportionately and increasingly represented in large cities. To study the allocation of workers across cities, we propose a quantitative spatial equilibrium model with multiple industries employing CNR and non-CNR workers. Productivity is city-industry-occupation specific and, as we estimate, partly determined by externalities that depend on local occupation shares and total employment. An optimal policy that benefits workers equally incentivizes the formation of cognitive hubs in large cities. It also creates higher overall activity in small cities, greater industrial specialization in the largest and smallest cities, and greater diversification in medium-sized cities.

JEL-codes: D62 D83 I26 J24 J31 R23 (search for similar items in EconPapers)
Date: 2026
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Related works:
Working Paper: Cognitive Hubs and Spatial Redistribution (2019)
Working Paper: Cognitive Hubs and Spatial Redistribution (2019)
Working Paper: Cognitive Hubs and Spatial Redistribution (2019)
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DOI: 10.1257/mac.20230013

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