This paper examines the productivity (and wage) gains from locating in dense, urban environments. We distinguish between three potential explanations of why firms are willing to pay urban workers more: (1) the urban wage premium is spurious and is the result of omitted ability measures, (2) the...

This paper examines the productivity (and wage) gains from locating in dense, urban environments. We distinguish between three potential explanations of why firms are willing to pay urban workers more: (1) the urban wage premium is spurious and is the result of omitted ability measures, (2) the...