Abstract. We estimate the respective importance of spatial sorting and agglomeration economies in explaining the urban wage premium for workers with different sets of skills. Sorting is the main source of the wage premium. Agglomeration economies are in general small, but are larger for workers with skills associated with non-routine job tasks. They also appear to involve human capital accumulation, as evidenced by the change in the wage of workers moving away from denser regions. For workers with routine jobs, agglomeration economies are virtually nonexistent. Our results provide further evidence of spatial density bringing about productivity advantages primarily in contexts when problem-solving and interaction with others are important.JEL classification: R12, R23, J24, J31
This article investigates how time distances within and between municipalities determine the spatial extent of local and regional labor markets. As time distances change, the extent of the labor market will also change. Diminishing time distances will bring about increases in labor market size by integrating formerly spatially separate markets. We analyze such processes using accessibility measures derived from a random choice preference function approach. Accessibility is measured in terms of number of jobs, labor supply and supply of service functions. The aim of the work is to illustrate the usefulness of the purpose-specific accessibility measure we introduce. JEL classification: R23, R30, R40
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