Market Thickness and the Early Labour Market Career of University Graduates: An Urban Advantage?

Lina Ahlin, Martin Andersson and Per Thulin (per.thulin@indek.kth.se)

Spatial Economic Analysis, 2014, vol. 9, issue 4, 396-419

Abstract: We analyse the influence of market thickness for skills on initial wages and the early job market career of university graduates. Using Swedish micro-level panel data on a cohort of graduates, we show that two out of three graduates move to large cities upon graduation. Large cities increase employment probabilities and yield higher rewards to human capital, even after controlling for employment selection. The premium on initial wages for graduates in urban regions is in the interval of 5–6%, and we estimate a wage-growth premium of about 2–4%. Thicker markets for skills appear as a key reason for the concentration of graduates to larger cities.

Date: 2014
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Working Paper: Market Thickness and the Early Labor Market Career of University Graduates- An urban advantage? (2013)
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DOI: 10.1080/17421772.2014.961534

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