The paper sheds light on the impact of spatial agglomeration of humancapital on individual wages in Western Germany. Using panel data itshows that regional wage differentials are to a large extent attributableto localized human capital externalities arising from the regional share ofhighly...

We test Krugman’s (1991) notion of risk sharing in pooled labormarkets as one of the micro-foundations of agglomerationeconomies, i.e. we examine whether firms share risks fromidiosyncratic and sector specific shocks through labor pooling.Estimating wage functions we find that job turnover...