Economic activity in high-income countries has shifted towards services and away from manufacturing. But research remains scant on the patterns of structural change within countries across urban and rural areas. Using micro data from France, Natalie Chen, Dennis Novy, Carlo Perroni and Horng Chern Wong show that the shift towards services has been more pronounced in urban areas. Large services firms have expanded in large French cities, helping boost their productivity and grow their services exports. The rise of services in urban areas has been accompanied by increased land prices and housing costs.

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24 December 2023

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Vox EU

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https://cepr.org/voxeu/columns/urban-biased-structural-change

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