Spatial Sorting ⇤

@inproceedings{Eeckhout2011SpatialS,
  title={Spatial Sorting ⇤},
  author={Jan Eeckhout and Roberto Pinheiro and Kurt Schmidheiny},
  year={2011}
}
We investigate the role of complementarities in production and skill mobility across cities. We propose a general equilibrium model of location choice by heterogeneously skilled workers, and consider di↵erent degrees of complementarities between the skills of workers. The nature of the complementarities determines the equilibrium skill distribution across cities. We prove that with extreme-skill complementarity, the skill distribution has fatter tails in large cities; with top-skill… CONTINUE READING