Learning by Working in Big Cities

Jorge De la Roca and Diego Puga

Review of Economic Studies, 2017, vol. 84, issue 1, 106-142

Abstract: Individual earnings are higher in bigger cities.We consider three reasons: spatial sorting of initially more productive workers, static advantages from workers' current location, and learning by working in bigger cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher initial unobserved ability as reflected in fixed effects. Instead, they obtain an immediate static premium and accumulate more valuable experience. The additional value of experience in bigger cities persists after leaving and is stronger for those with higher initial ability. This explains both the higher mean and greater dispersion of earnings in bigger cities.

Keywords: Agglomeration economies; City sizes; Learning; Earnings premium (search for similar items in EconPapers)
JEL-codes: J31 R10 R23 (search for similar items in EconPapers)
Date: 2017
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Related works:
Working Paper: Learning by Working in Big Cities (2016)
Working Paper: Learning by working in big cities (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:84:y:2017:i:1:p:106-142.

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