Working Paper: CEPR ID: DP4048
Authors: Sylvie Charlot; Gilles Duranton
Abstract: To identify communication externalities in French cities, we exploit a unique survey recording workplace communication of individual workers. Our hypothesis is that in larger and/or more educated cities, workers should communicate more. In turn, more communication should have a positive effect on individual wages. By estimating both an earnings and a communication equation, we find evidence of communication externalities. Being in a larger and more educated city makes workers communicate more and in turn this has a positive effects on wages. Only a small fraction of the overall effects of a more educated and larger city on wages percolates through this channel, however.
Keywords: Cities; Communication Externalities; Human Capital
JEL Codes: J31; R19; R29
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Larger and more educated cities (R12) | Increased workplace communication (L96) |
| Increased workplace communication (L96) | Individual wages (J31) |
| Larger and more educated cities (R12) | Individual wages (J31) |
| City size and education (I24) | Individual wages (J31) |