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Agglomeration and labor-market activities : evidence from U.S. cities

Abstract

The three chapters of this dissertation examine evidence on relationships between patterns of agglomeration within the United States and workers' industry and occupation decisions. The first chapter investigates agglomeration economies in the form of job search and matching. Using data from the U.S. Census and the Current Population Survey, I show that, on average, workers change occupation and industry less in more densely populated areas. These results provide evidence in favor of increasing-returns-to -scale matching in labor markets. The second chapter examines the distribution of new work across U.S. cities. Using Census microdata, I find that new work--that is, new types of activities that closely follow innovation-- concentrates in cities that initially have more college graduates and a more diverse industrial base. This evidence is consistent with concentrations of human capital facilitating regional adaptation to new technologies. Finally, in the third chapter, I explore why industrial diversity is important for regional adaptation to innovation. Using employment estimates for detailed new occupations from the Occupation Employment Statistics, I find that diversified cities use new activities more intensively, even as these activities mature. These results suggest that a "nursery cities" model of industrial structure and regional innovation may not fully describe the agglomeration pattern of new activities

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