Productivity in Cities: Self-Selection and Sorting

17 Pages Posted: 22 Nov 2010

See all articles by Anthony J. Venables

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Date Written: October 2010

Abstract

Productivity is high in cities partly because the urban environment acts as a self-selection mechanism. If workers have imperfect information about the quality of workers with whom they match and matches take place within cities, then high-ability workers will choose to live and work in expensive cities. This self-selection improves the quality of matches in such cities. The mechanism may be reinforced by the development of informational networks in cities with a large proportion of high ability workers. As a consequence productivity in these cities is high for workers of all ability types.

Keywords: city, economic geography, productivity, self-selection, sorting, urban

JEL Classification: R0, R1

Suggested Citation

Venables, Anthony J., Productivity in Cities: Self-Selection and Sorting (October 2010). CEPR Discussion Paper No. DP8067. Available at SSRN: https://ssrn.com/abstract=1711080

Anthony J. Venables (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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