Occupational Matching and Cities
No 1011, Boston College Working Papers in Economics from Boston College Department of Economics
In this paper, I document that workers in larger cities have significantly more occupational options than workers in smaller ones. They are able to form better occupational matches and earn higher wages. I also note differences in the occupational reallocation patterns across cities. I develop a dynamic model of occupational choice that microfounds agglomeration economies and captures the empirical patterns. The calibration of the model suggests that better occupational match quality accounts for approximately 35% of the observed wage premium and a third of the greater inequality in larger cities.
Keywords: Occupations; Agglomeration Economies; Urban Wage Premium; Multi-armed Bandits; Geographical Mobility; Matching Theory; Wage Inequality; Job Vacancy Postings (search for similar items in EconPapers)
JEL-codes: J24 J31 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-geo, nep-lma, nep-ore and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:1011
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