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CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University Papers in Innovation Studies, CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University

No 2013/2:
Market Thickness and the Early Labor Market Career of University Graduates- An urban advantage?

Lina Ahlin (), Martin Andersson () and Per Thulin ()

Abstract: We analyze the influence of market thickness for skills on initial wages and subsequent wage development 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 yield higher rewards to human capital and a stronger early job market career. The premium on initial wages for urban graduates is in the interval of 6-12 percent, and we estimate a wage-growth premium of about 3 percent. Thicker markets for skills appear as a key reason for the concentration of university graduates to larger cities.

Keywords: human capital; university graduates; urban wage premium; market thickness; matching; agglomeration economies; migration; job switching; (follow links to similar papers)

JEL-Codes: J31; J61; R10; R12; (follow links to similar papers)

32 pages, February 14, 2013

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