Cities and the Growth of Wages Among Young Workers: Evidence from the NLSY

By Christopher H. Wheeler. 2005

156 citations recorded by the source corpus.

Human capital-based theories of cities suggest that large, economically diverse urban agglomerations increase worker productivity by increasing the rate at which individuals acquire skills. One largely unexplored implication of this theory is that workers in big cities should see faster growth in their earnings over time than comparable workers in smaller markets. This paper examines this implication using data on a sample of young male workers drawn from the National Longitudinal Survey of Youth 1979 Cohort. The results suggest that earnings growth does tend to be faster in large, economically diverse local labor markets - defined as counties and metropolitan areas - than in smaller, more specialized markets. Yet, when examined in greater detail, I also find that this association tends to be the product of faster wage growth due to job changes rather than faster wage growth experienced while on a particular job. This result is consistent with the idea that cities enhance worker productivity through a job search and matching process and, thus, that an important aspect of 'learning' in cities may involve individuals learning about what they do well.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/5adf313aef931986703acf238e326ab50c00f4ee

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Citations in the corpus

The urban wage growth premium: sorting or learning? (2014, methodology): “One remaining concern, which has received some attention in the literature (Wheeler, 2006; Yankow, 2006) is that movers are on average younger and less experienced than non-movers.”
The attenuation of human capital spillovers (2008, background): “See, for instance, Combes et al. (2003, 2008), Tabuchi and Yoshida (2000), Di Addario and Patacchini (in press), and Wheeler (2006).”
Marshallian Labour Market Pooling: Evidence From Italy (2013, background): “Glaeser and Maré (2001), Wheeler (2006), and De la Roca and Puga (2012) all provide evidence that the urban wage premium rises with a worker tenure in a city, a finding consistent with learning.”
Spatial wage disparities: Sorting matters! (2008, background): “A third hypothesis (Glaeser and Maré, 2001; Wheeler, 2006) is that workers may learn more in larger cities.”
Agglomeration and productivity: evidence from firm-level data (2011, background): “In individual-level studies of the ‘urban productivity premium’, the issue of ‘selection’ versus ‘learning’ is often dealt with by making a distinction between a level- and growth-effect (see, e.g., Glaeser and Mare 2001; Wheeler 2006; Yankow 2006).”
The interregional migration of human capital and its regional consequences: a review (2017, background): “Some studies show that college students move to urban areas following graduation to take advantage of an urban wage premium (Glaeser & Maré, 2001; Wheeler, 2006; Yankow, 2006), implying that the moves of this group could further augment the disparities between rural and urban regions.”