Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/44164
Authors: 
Di Addario, Sabrina
Vuri, Daniela
Year of Publication: 
2010
Series/Report no.: 
Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5098
Abstract: 
We analyze empirically the effects of urban agglomeration on Italian college graduates' work possibilities as entrepreneurs three years after graduation. We find that each 100,000 inhabitant-increase in the size of the individual's province of work reduces the chances of being an entrepreneur by 0.2-0.3 percent. This result holds after controlling for regional fixed effects and is robust to instrumenting urbanization. Province's competition, urban amenities and dis-amenities, cost of labor, earning differentials between employees and self-employed workers, unemployment rates and value added per capita account for 40 percent of the negative urbanization penalty. Our result cannot be explained by the presence of negative large-city differentials in returns to education either. In fact, as long as they succeed in entering the largest markets, young entrepreneurs are able to reap-off the benefits of urbanization externalities: every 100,000-inhabitant increase in the province's population raises entrepreneurs' net monthly income by 0.2-0.3 percent.
Subjects: 
labor market transitions
urbanization
JEL: 
R12
J24
J21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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