In this note, we show that labour market integration can be a double-edged sword. In the presence of local human capital externalities, integration and the ensuing agglomeration of skilled labour can cause a decline in human capital and the total wage sum (net of education costs). In particular,...

I examine the causes and the consequences of differences in labor market outcomes across local labor markets within a country. The focus is on a long-run general equilibrium setting, where workers and firms are free to move across localities and local prices adjust to maintain the spatial...

Young highly educated workers developed in the 70's and 80's a preference for working in larger cities. As a consequence highly educated young workers in 1990 were over-represented in cities, in spite of the lower wage premium they earned for working in crowded metropolitan areas if compared to...