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Skill wage premium and city size

Author

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  • Edivaldo C. Neves Jr
  • Carlos R. Azzoni, Andre Chagas

Abstract

We estimate the urban wage premium for the Brazilian case, exploring how it is heterogeneous for workers/occupations with distinct skills. Every worker/occupation was assigned a level of cognitive, social and motor skills. Using a rich database matching firms and workers, we replicate the wage premium results of other studies. However, we were able to show that the wage premium does not affect equally all occupations/workers. We found a positive association between cognitive and social skills and urban size, especially for workers/occupations that use intensively those skills, and a less intense or non-significant effect for motor skills. Returns to cognitive skills are positive across the whole range or urban sizes, but returns to social skills are only present in large urban agglomerations. Furthermore, interactions of social and cognitive skills inflate the skill wage premium associated with urban size.

Suggested Citation

  • Edivaldo C. Neves Jr & Carlos R. Azzoni, Andre Chagas, 2017. "Skill wage premium and city size," Working Papers, Department of Economics 2017_19, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2017wpecon19
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    References listed on IDEAS

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    More about this item

    Keywords

    Urban premium; skills; sorting;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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