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CEP/Geography Urban and Regional Economics Seminars

Tasks, cities and urban wage premia

Anja Grujovic (Center for Monetary & Financial Studies (CEMFI))

Friday 19 June 2020 13:00 - 14:30


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About this event

Combining rich administrative data for Germany with representative workforce surveys, I find that job task content is robustly predictive of differences in urban wage premia across otherwise observationally equivalent individuals. Based on this, I propose a model where productive advantages of cities are inherently task-specific. Workers of higher ability have a comparative advantage in the tasks whose production benefits the most from urban spillovers. In equilibrium, bigger cities generate larger externalities for more able agents and urban wage premia is skill-biased. I estimate the model using German worker panel data on 336 districts, 331 occupations, 3 education categories and 3 tasks. I find that one standard deviation increase in abstract task intensity is associated with a 0.3 percentage point increase in the elasticity of earnings with respect to population size. Differences in task-specific urban wage premia remain significant even after controlling for skill premia of larger cities.

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Urban and Regional Economics Seminars are part of the CEP's Urban and spatial programme.