City of Dreams

Jorge De la Roca, Gianmarco Ottaviano and Diego Puga

Working Papers from CEMFI

Abstract: Higher ability workers benefit more from bigger cities while housing costs there are higher for everyone. However, there is little sorting on ability. We show this is partly because young individuals have an imperfect assessment of their ability, and, when they learn about it, early decisions have had a lasting impact and reduce their incentives to move. We formalize this idea through an overlapping generations model of urban sorting by workers with heterogeneous ability and self-confidence. Using data from the NLSY79, we find that the citysize choices of individuals vary with ability and self-confidence in line with our theoretical predictions.

Keywords: Cities; sorting; agglomeration; self-confidence; ability; learning. (search for similar items in EconPapers)
JEL-codes: R10 R23 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.cemfi.es/ftp/wp/1609.pdf (application/pdf)

Related works:
Journal Article: City of Dreams (2023)
Working Paper: City of Dreams (2014)
Working Paper: City of dreams (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cmf:wpaper:wp2016_1609

Access Statistics for this paper

More papers in Working Papers from CEMFI Contact information at EDIRC.
Bibliographic data for series maintained by Araceli Requerey ().