TY  - JOUR
AU  - Glaeser,Edward L.
AU  - Mare,David C.
TI  - Cities and Skills
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4728
PY  - 1994
Y2  - May 1994
UR  - http://www.nber.org/papers/w4728
L1  - http://www.nber.org/papers/w4728.pdf
N1  - Author contact info:
Edward L. Glaeser
Department of Economics
315A Littauer Center
Harvard University
Cambridge, MA 02138
Tel: 617/495-0575
Fax: 617/495-7730
E-Mail: eglaeser@harvard.edu
AB  - This paper examines the productivity (and wage) gains from locating in dense, urban environments.  We distinguish between three potential explanations of why firms are willing to pay urban workers more: (1) the urban wage premium is spurious and is the result of omitted ability measures, (2) the urban wage premium works because cities enhance productivity and (3) the urban wage premium is the result of faster skill accumulation in cities.  Using a combination of standard regressions, individual fixed effects estimation (using migrants) and instrumental variables methods, we find that the urban wage premium does not represent omitted ability bias and it is only in part a level effect to productivity.  The bulk of the urban wage premium accrues over time as a result of greater skill accumulation in cities.
ER  -