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This paper aims at disentangling the role played by different explanations on the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from lower to higher density areas in Italy, using quantile regressions and individual data. The results show that unskilled workers benefit more from a wage premium accruing over time, while skilled workers enjoy a wage premium when they migrate as well as a wage increase over time. Further, we find that for unskilled workers the wage growth over time is mainly due to human capital accumulation in line with the "learning" hypothesis, while for skilled workers the wage growth is mainly explained by the "coordination" hypothesis, i.e., cities enhance the probability of better matches between workers and firms.JEL Classification: J31, J61, R23.

Raul Ramos (AQR-IREA, UB)Purpose: The purpose of this paper is to analyse and explain the factors contributing to the observed differences in skill mismatches (vertical and horizontal) between natives and immigrants in EU countries.Design/methodology/approach: Using microdata from the 2007 wave of the Adult Education Survey (AES), different probit models are specified and estimated to analyse differences in the probability of each type of skill mismatch between natives and immigrants. Yun's decomposition method is used to identify the relative contribution of characteristics and returns to explain the differences between the two groups.. Findings:Immigrants are more likely to be skill mismatched than natives. The difference is much larger for vertical mismatch, wherein the difference is higher for immigrants coming from non-EU countries than for those coming from other EU countries. We find that immigrants from non-EU countries are less valued in EU labour markets than natives with similar characteristics-a result that is not observed for immigrants from EU countries. These results could be related to the limited transferability of human capital acquired in non-EU countries. Social implications:The findings suggest that specific programs to adapt immigrants' human capital acquired in the home country are required to reduce differences in the incidence of skill mismatch and better integration into EU labour markets.Originality: This research is original, because it distinguishes between horizontal and vertical mismatch-an issue that has not been considered in the literature on differences between native and immigrant workers-and due to the wide geographical scope of our analysis, which considers EU and non EU-countries.

This article investigates the incidence of agglomeration externalities in Ecuador, a small‐sized, middle‐income developing country. In particular, we analyze the role of the informal sector within these relations, since informal employment accounts for a significant part of total employment in the developing countries. Using individual level data and instrumental variable techniques, we investigate the impact of spatial externalities, in terms of population density, local specialization and urban size, on the wages of workers in Ecuadorian cities. The results show that spatial externalities matter also for a small developing country. Moreover, analysis of the interaction between spatial externalities and informality shows that, on average, workers employed in the informal sector do not enjoy significant benefits from agglomeration externalities. Finally, by investigating the possible channels behind spatial agglomeration gains we show that the advantages from agglomeration for formal sector workers may well be accounted for by better job‐quality matches and, to a lesser extent, by learning externalities. For informal sector workers, our findings also suggest possible gains from job changes, which offset a penalty for remaining employed in the same occupation.

The relation between rent sharing and wages has generally been evaluated on average wages. This article uses a unique employer–employee panel database to investigate the extent of rent sharing along the wage distribution in Italy. We apply quantile regression techniques and control for national level bargaining, unobserved worker and firm heterogeneity and endogeneity. Our findings show that the extent of rent sharing decreases along the wage distribution, suggesting that unskilled workers benefit most from firms’ rents. By applying quantile regressions by occupational categories, we show that the decreasing pattern is mainly driven by blue collar workers, while estimates for white collars are higher and basically constant along the wage distribution. We also provide evidence that unions might represent one of the drivers of our findings.