Spatial Sorting

Jan Eeckhout, Roberto Pinheiro and Kurt Schmidheiny

Journal of Political Economy, 2014, vol. 122, issue 3, 554 - 620

Abstract: We investigate the role of skill complementarities in production and mobility across cities. The nature of the complementarities determines the equilibrium skill distribution across cities. With extreme-skill complementarity, the skill distribution has thicker tails in large cities; with top-skill complementarity, there is first-order stochastic dominance. Using wage and housing price data, we find robust evidence of thick tails in large cities: large cities disproportionately attract both high- and low-skilled workers, while average skills are constant across city size. This pattern of spatial sorting is consistent with extreme-skill complementarity, where the productivity of high-skilled workers and of the providers of low-skilled services are mutually enhanced.

Date: 2014
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Related works:
Working Paper: Spatial sorting (2013)
Working Paper: Spatial Sorting (2013)
Working Paper: Spatial Sorting (2011)
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