The relative importance of portable and non-portable agglomeration effects for the urban wage premium
Using administrative data for West Germany, we study the relative importance of portable and non-portable agglomeration effects for the urban wage premium. In doing so, we advance the established strategy of estimating wage-tenure profiles for urban-rural and rural-urban movers by adding worker, firm, and match fixed effects. This allows us to distinguish unambiguously between both types of agglomeration effects. Our results show that portable and non-portable agglomeration effects equally contribute to the urban wage premium. Moreover, portable agglomeration effects are not only observed in the biggest cities. Instead, the speed of human capital accumulation continuously increases with city size.
Frings, H. and R. Kamb (2022), The relative importance of portable and non-portable agglomeration effects for the urban wage premium. Regional Science and Urban Economics, 95, 103786