We assess the empirical literature on the determinants of spatial variations in new-firm formation rates by undertaking a systematic empirical analysis of the relative roles of different demand- and supply-side factors. Using instrumental variables to address endogeneity, we find that local...

Sorting of high-ability workers is a main source of urban-rural disparities in economic outcomes. Less is known about when such human capital sorting occurs and who it involves. Using data on 15 cohorts of university graduates in Sweden, we demonstrate significant sorting to urban regions on...