Working Paper: NBER ID: w25678
Authors: Jonathan I. Dingel; Antonio Miscio; Donald R. Davis
Abstract: In developed economies, agglomeration is skill-biased: larger cities are skill-abundant and exhibit higher skilled wage premia. This paper characterizes the spatial distributions of skills in Brazil, China, and India. To facilitate comparisons with developed-economy findings, we construct metropolitan areas for each of these economies by aggregating finer geographic units on the basis of contiguous areas of light in nighttime satellite images. Our results validate this procedure. These lights-based metropolitan areas mirror commuting-based definitions in the United States and Brazil. In China and India, which lack commuting-based definitions, lights-based metropolitan populations follow a power law, while administrative units do not. Examining variation in relative quantities and prices of skill across these metropolitan areas, we conclude that agglomeration is also skill-biased in Brazil, China, and India.
Keywords: Urbanization; Skill Distribution; Developing Economies; Nightlights; Metropolitan Areas
JEL Codes: C81; O18; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Larger cities (R12) | Higher proportion of skilled workers (J24) |
| Urban agglomeration (R11) | Higher wages for skilled workers (J31) |
| Larger cities (R12) | Higher population elasticities of skilled groups (J11) |
| Higher population elasticities of skilled groups (J11) | More skilled individuals attracted (J24) |
| Urbanization (R11) | Skill distribution (J24) |
| Skill gradient (J24) | Closer to city centers (R11) |