Productivity in cities: self-selection and sorting.

Working paper

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.

Authors: Venables, A

• Publisher: Department of Economics (University of Oxford)
• Series: Discussion paper series
• Publication date: 2010-10-01
• Language: English