LSE alumni Frederic Robert-Nicoud, Professor of Political Economy, and Salvatore Di Falco, Professor of Environmental Economics, both now at the University of Geneva, cordially invite all economists among the members of the Association to
a Research Seminar with Professor Henry Overman
who will be speaking on the sources of spatial sorting
on Friday, 24 April 2015, at 12:15
Abstract: The urban economics literature recognizes that the spatial sorting of more productive workers into more productive locations plays an important role in explaining disparities across space. However, the literature is unclear on how this sorting occurs. In the presented paper, we focus on the sources of spatial sorting. In particular, we study the role of birthplace in determining labour market outcomes and consider the mechanisms through which such "home-town" effects arise. To do this, we estimate wage regressions using individual level data for a large panel of UK workers. We use individual level fixed effects from these regressions to assess the relative contributions of birthplace and of individual characteristics correlated with birthplace (parents' characteristics, education, occupations, current location). We find that lifetime mobility is quite low and that mobility depends on both education and birthplace characteristics. City size birth place is positively correlated with current wages, with individuals born in London having 20 percent higher wages than individuals born in rural areas. Half of this gap is explained by inter-generational transmissions and the effect of birthplace on current location. But the other half remains unexplained after controlling for individual characteristics. Results suggest large variations in life chances across birthplace in the UK.
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