Matching in Cities

Wolfgang Dauth, Sebastian Findeisen, Enrico Moretti and Jens Suedekum

Journal of the European Economic Association, 2022, vol. 20, issue 4, 1478-1521

Abstract: Using administrative German data, we show that large cities allow for a more efficient matching between workers and firms and this has important consequences for geographical inequality. Specifically, the match between high-quality workers and high-quality plants is significantly tighter in large cities relative to small cities. Wages in large cities are higher not only because of the higher worker quality but also because of a stronger assortative matching. Strong assortative matching in large cities magnifies wage differences caused by worker sorting, and is a key factor in explaining the growth of geographical wage disparities over the last three decades.

Date: 2022
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Matching in Cities (2019)
Working Paper: Matching In Cities (2018)
Working Paper: Matching in Cities (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:20:y:2022:i:4:p:1478-1521.

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