Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/93602 
Year of Publication: 
2012
Series/Report no.: 
Staff Report No. 587
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We study one potential source of urban agglomeration economies: better job matching. Focusing on college graduates, we construct two direct measures of job matching based on how well an individual's job corresponds to his or her college education. Consistent with matching-based theories of urban agglomeration, we find evidence that larger and thicker local labor markets help college graduates find better jobs by increasing both the likelihood and quality of a match. We then assess the extent to which better job matching of college-educated workers increases individual-level wages and thereby contributes to the urban wage premium. While we find that college graduates with better job matches do indeed earn higher wages on average, the contribution of such job matching to aggregate urban productivity appears to be relatively modest.
Subjects: 
agglomeration
labor market matching
productivity
underemployment
urban wage premium
JEL: 
I21, J24, J31, R23
Document Type: 
Working Paper

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