Journal
JOURNAL OF INTERNATIONAL ECONOMICS
Volume 123, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jinteco.2020.103291
Keywords
Agglomeration; Assignment models; Cities; Comparative advantage
Categories
Funding
- Institute for Humane Studies
- Program for Economic Research at Columbia University
- Kathryn and Grant Swick Faculty Research Fund at the University of Chicago Booth School of Business
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What determines the distributions of skills, occupations, and industries across cities? We develop a theory to jointly address these fundamental questions about the spatial organization of economies. Our model incorporates a system of cities, their internal urban structures, and a high-dimensional theory of factor-driven comparative advantage. It predicts that larger cities will be skill-abundant and specialize in skill-intensive activities according to the monotone likelihood ratio property. We test the model using data on 270 US metropolitan areas, 3 to 9 educational categories, 22 occupations, and 19 industries. The results provide support for our theory's predictions. (C) 2020 Elsevier B.V. All rights reserved.
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