We propose a theory of skill mobility across cities. It predicts the well documented city size--wage premium: the wage … distribution in large cities first-order stochastically dominates that in small cities. Yet, because this premium is reflected in … skilled disproportionately sort into the biggest cities, while those with medium skill levels sort into small cities. The …

across different cities. In so doing, we propose a simple two-city model with two mobile cultural groups. A localized … in different cities when diaspora members find it hard to communicate at distance whereas they integrate in multicultural … cities when communication is easy. The model generates situations in which segregation is an equilibrium but is Pareto …

Productivity is high in cities partly because the urban environment acts as a self-selection mechanism. If workers have … imperfect information about the quality of workers with whom they match and matches take place within cities, then high …-ability workers will choose to live and work in expensive cities. This self-selection improves the quality of matches in such cities …