This paper analyses the impact of dynamic MAR- and Jacobs-externalities on local employment growth in Germany between 1993 and 2001. In order to facilitate a comparison between the neighbouring countries we firstly replicate the study of Combes (2000) on local employment growth in France and...

In this paper I analyze the impact of human capital on local employment growth for the case of West Germany (1977-2002). I find robust evidence that skilled cities grow faster than unskilled ones, but this need not indicate localized human capital externalities are at work. A large initial share...

In this paper we survey the recent developments in two empirical literatures at the crossroads of labor and urban economics: Studies about localized human capital externalities (HCE) and about the urban wage premium (UWP). After surveying the methods and main results of each of these two...

Standard models of the new economic geography predict that costs of living are lower in the core than in the periphery. But in reality they tend to be higher in agglomeration areas, mainly because of regional differences in housing costs. In this paper, we add a home goods sector to the seminal...

What effect does employment protection through severance payments have on the behaviour of employed workers? We analyse this issue within a stochastic two-period framework where workers decide on human capital investments and find two competing effects: severance payments imply higher job...

In this paper we show that the recent model by Duranton (AER, 2007) performs remarkably well in replicating the city size distribution of West Germany, much better than the simple rank-size rule known as Zipf’s law. The main mechanism of this theoretical framework is the "churning" of...

This paper formulates a weighted regression approach to analyze the impact of dynamic MAR- and Jacobs-externalities on local employment growth in Germany between 1993 and 2001. We find that Jacobs-externalities matter both in manufacturing, and service industries. MAR-externalities are present...

Recent trade and location theories (e.g., the "new economic geography") deal with regional disparities in production and income, but assume full employment and are thus ill equipped to study regional unemployment disparities. The wage curve-approach, which explicitly shows how disparities in...