Matching in Cities

Abstract

"Using administrative German data, we show that large cities allow for a more efficient matching between workers and firms and this has important consequences for geographical inequality. Specifically, the match between high-quality workers and high-quality plants is significantly tighter in large cities relative to small cities. Wages in large cities are higher not only because of the higher worker quality, but also because of a stronger assortative matching. Strong assortative matchig in large cities magnifies wage differences caused by worker sorting, and is a key factor in explaining the growth of geographical wage disparities over the last three decades." (Author's abstract, © 2022 Oxford University Press) ((en))

Cite article

Dauth, W., Findeisen, S., Moretti, E. & Südekum, J. (2022): Matching in Cities. In: Journal of the European Economic Association, Vol. 20, No. 4, p. 1478-1521. DOI:10.1093/jeea/jvac004