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Learning by working in big cities

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In this paper, the authors consider three reasons: spatial sorting of initially more productive workers, static advantages from workers' current location, and learning by working in bigger cities and find that workers in big cities do not have higher initial ability as reflected in fixed effects.
Abstract
Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages from workers' current location, and learning by working in bigger cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher initial ability as reflected in fixed-effects. Instead, they obtain an immediate static premium and accumulate more valuable experience. The additional value of experi- ence in bigger cities persists after leaving and is stronger for those with higher initial ability. This explains both the higher mean and greater dispersion of earnings in bigger cities.

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References
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Book ChapterDOI

Testing for Weak Instruments in Linear IV Regression

TL;DR: This paper proposed quantitative definitions of weak instruments based on the maximum IV estimator bias, or the maximum Wald test size distortion, when there are multiple endogenous regressors, and tabulated critical values that enable using the first-stage F-statistic (or, for instance, the Cragg-Donald (1993) statistic) to test whether give n instruments are weak.
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Productivity and the Density of Economic Activity

TL;DR: The authors found that agglomeration more than offsets congestion effects in denser areas, which explains more than 50% of the observed state productivity differences, given the large differences in density.
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Micro-Foundations of Urban Agglomeration Economies

TL;DR: In this paper, the theoretical micro-foundations of urban agglomeration economies are studied, based on sharing, matching, and learning mechanisms, and a handbook chapter is presented.
Book ChapterDOI

Evidence on the Nature and Sources of Agglomeration Economies

TL;DR: In this paper, the authors consider the empirical literature on the nature and sources of urban increasing returns, also known as agglomeration economies, and show that the effects of aggoglomeration extend over at least three different dimensions.
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Evidence on the nature and sources of agglomeration economies

TL;DR: In this article, the authors consider the empirical literature on the nature and sources of urban increasing returns, also known as agglomeration economies, and show that the effects of aggoglomeration extend over at least three different dimensions.
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What are the advantages of learning by working in big cities?

The advantages of learning by working in big cities include an immediate static premium and the accumulation of more valuable experience, leading to higher earnings and greater dispersion of earnings.