Wolfgang Dauth, Sebastian Findeisen, Enrico Moretti, Jens Südekum, 06 January 2019

Large internal wage disparities between cities are a common feature in countries around the world. Using data from Germany, this column argues that one key driver of this is rising assortative matching of high-quality workers and plants in large cities. One promising strategy to reduce spatial wage disparities is to improve matching within small cities.

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