PUBLISHED REFEREED ARTICLES
Learning by working in big cities (with Diego Puga)
Review of Economic Studies 84(1), 2017: 106–142
Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages from workers' current location, and learning by working in bigger cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher initial unobserved ability as reflected in fixed-effects. Instead, they obtain an immediate static premium and accumulate more valuable experience. The additional value of experience in bigger cities persists after leaving and is stronger for those with higher initial ability. This explains both the higher mean and greater dispersion of earnings in bigger cities.
Wage cyclicality: Evidence from Spain using social security data
SERIEs: Journal of the Spanish Economic Association 5(2), 2014: 173–195
Using longitudinal social security data, this study finds evidence of weak real wage cyclicality in Spain throughout 1988-2011. The baseline estimate of a 0.4% increase in wages in response to a one percentage point decline in the unemployment rate lies in the lower bound of available estimates for developed countries. Wage cyclicality in a rigid labour market like Spain is mainly driven by workers under temporary contracts and newly-hired workers. I calculate the cyclicality of the net present value of wages in new matches—the relevant piece of information for firms posting vacancies, but a rarely available measure—and find that it is well approximated by the cyclicality of wages for newly-hired workers.
Race and neighborhoods in the 21st century: What does segregation mean today? (with Ingrid Gould Ellen and Katherine M. O'Regan)
Regional Science and Urban Economics 47, 2014: 138–151
Noting the decline in segregation between blacks and whites over the past several decades, some recent work argues that racial segregation is no longer a concern in the 21st century. In response, this paper revisits some of the concerns that John Quigley raised about racial segregation and neighborhoods to assess their relevance today. We note that while segregation levels between blacks and whites have certainly declined, they remain quite high; Hispanic and Asian segregation have meanwhile remained unchanged. Further, our analysis shows that the neighborhood environments of minorities continue to be highly unequal to those enjoyed by whites. Blacks and Hispanics continue to live among more disadvantaged neighbors, to have access to lower performing schools, and to be exposed to more violent crime. Further, these differences are amplified in more segregated metropolitan areas.
Selection in initial and return migration: Evidence from moves across Spanish cities
Revised and resubmitted at the Journal of Urban Economics
This paper investigates the contribution of migration to the sorting of more productive workers into bigger cities using administrative data for Spain that follow workers over their lives. Migrants to bigger cities are positively selected in terms of education, occupational skills, and individual productivity as proxied by their pre-migration position in the local earnings distribution. However, not everyone benefits equally from bigger cities and this leads to a second round of sorting. Returnees are not only ex-ante less productive than permanent migrants, but are also those who, following the first move, have least boosted up their earnings in bigger cities.
City of dreams (with Gianmarco Ottaviano and Diego Puga)
Higher ability workers benefit more from bigger cities while housing costs there are higher for everyone, and yet there is little sorting on ability. A possible explanation is that young individuals have an imperfect assessment of their ability, and, when they learn about it, early decisions have had a lasting impact and reduce their incentives to move. We formalize this idea through an overlapping generations model of urban sorting by workers with heterogenous ability and self-confidence, with the latter defined as individuals' assessment of their own ability. We then test the location patterns predicted by the model over the life cycle on panel data from the National Longitudinal Survey of Youth 1979. We find that the city-size choices of individuals at different stages vary with ability and self-confidence in a way that closely matches our theoretical predictions.
Are there upward inter-generational education spillovers on health? The influence of children education on parental smoking cessation (with Erica Field)
We examine the influence of child schooling on preventive health behaviour of parents. We look for evidence of upward intergenerational spillover effects by following a sample of 30-year-old smokers through age 50 and jointly examining changes in tobacco use and child schooling attainment. To account for the endogeneity of child schooling, we make use of variation in the cost of college attendance stemming from the uneven expansion of post-secondary schools across U.S. counties between 1946 and 1994. Results indicate that child education has a large positive effect on the rate of smoking cessation at older but not younger ages. Parents who smoke at ages 50 and 60 are 28% more likely to quit smoking in the next ten years if they have college educated children.
The significance of segregation in the 21st century (with Ingrid Gould Ellen and Justin P. Steil)
City & Community 15(1), 2016: 8–13
Desvinculado y desigual: Is segregation less harmful to Latinos? (with Ingrid Gould Ellen and Justin P. Steil)
The Annals of the American Academy of Political and Social Science 660(1), 2015: 57–76