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Title: Search, Sorting, and Urban Agglomeration

Citation Type: Journal Article

Publication Year: 2001

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Abstract: Studies have suggested that urban agglomeration enhances productivity by facilitating the firm-worker matching process. This article develops a model that formalizes this notion and demonstrates that, when firm capital and worker skill are complementary in production, urban agglomeration will tend to generate more efficient, yet segregated matches. As a result, not only will local market size be positively associated with average productivity, it will also generate greater between-skill-group wage inequality and a higher expected return to skill acquisition. Recent data from the counties and metropolitan areas of the United States is consistent with each of these implications.

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Authors: Wheeler, Christopher H.

Periodical (Full): Journal of Labor Economics

Issue: 4

Volume: 19

Pages: 879-899

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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