Market Thickness and the Early Labour Market Career of University Graduates: An Urban Advantage?

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Abstract

A < sc > bstract </sc > We analyse the influence of market thickness for skills on initial wages and the early job market career of university graduates. Using Swedish micro-level panel data on a cohort of graduates, we show that two out of three graduates move to large cities upon graduation. Large cities increase employment probabilities and yield higher rewards to human capital, even after controlling for employment selection. The premium on initial wages for graduates in urban regions is in the interval of 5-6%, and we estimate a wage-growth premium of about 2-4%. Thicker markets for skills appear as a key reason for the concentration of graduates to larger cities.

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Subject classification (UKÄ) – MANDATORY

  • Social Sciences Interdisciplinary

Keywords

  • matching, mobility, agglomeration economies, job switching, university, graduates, market thickness, urban wage premium, Human capital
Original languageEnglish
Pages (from-to)396-419
JournalSpatial Economic Analysis
Volume9
Issue number4
Publication statusPublished - 2014
Publication categoryResearch
Peer-reviewedYes