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  • Both large establishments and large cities are known to offer workers an earnings premium. In this paper, we show that these two premia are closely linked by documenting a new fact: when workers move to a large city, they also move to larger establishments. We then ask how much of the city-size earnings premium can be attributed to transitions to larger and better-paying establishments. Using administrative data from Spain, we find that 38 percent of the city-size earnings premium can be explained by establishment-size composition. Most of the gains from the transition to larger establishments realize in the short-term upon moving to the large city. Establishment size explains 29 percent of the short-term gains, but only 5 percent of the medium-term gains that accrue as workers gain experience in the large city. The small contribution to the medium-term gains is due to two facts: first, within large cities workers transition to large establishments only slightly faster than in smaller cities; second, the relationship between earnings and establishment size is weaker in large cities. (xsd:string)
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  • 2023 (xsd:gyear)
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  • 2023 (xsd:gyear)
?:doi
  • 10.1016/j.jue.2023.103556 ()
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  • JUE insight: The role of establishment size in the city-size earnings premium (xsd:string)
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  • In Journal of Urban Economics, 136, 1-17, 2023 (xsd:string)
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  • European Union Labour Force Survey (EU-LFS) (xsd:string)
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  • 136 (xsd:string)