Carlos Azzoni (p)

The paper assesses how the relationship between urban size and productivity varies for workers with different skills. We use highly detailed yearly data on 6.5 million workers with a formal labor contract, covering demographics, occupation description and wage levels, as well as information on the firms (sector, size, location) etc. We work with around 1,000 labor market areas, composed of municipalities constituting a commuting space for workers. Based on an adaptation of the American Occupational Information Network (ONET) to the Brazilian setting, we have computed for each worker, in each year, three scores, representing the intensity of the cognitive, social and motor skills involved in his/her activity. We than estimate mincerian equations to determine the factors affecting wage levels, used as a proxy for productivity, achieving the standards results from the literature. We then estimate how the importance of cognitive, social and motor skills varies with the size. We find that returns to skill grows with city size, especially so for cognitive and social skills, and much less so for motor skills. Returns to skills are particularly large for workers with a combination of cognitive and social skills. Although large urban areas present advantages for all types of skills, our results indicate that the bulk of that advantage comes from cognitive and social skills. In that sense, large urban centers are the realm of workers with cognitive and social skills.

Albert Yirmiyahu (p), Ofir Rubin, Miki Malul

Many studies assessing national policy reforms in education focus on the likelihood of acquiring an advanced education and the associated returns in the labor market. In this study we investigate the impact of the Israeli Academic Colleges Law originally designed to promote the acquisition of higher education among all segments of the Israeli population. We found that this law actually contributed more to making higher education accessible to residents of the periphery than to the rest of the population. In addition, we demonstrate that the law's influence on improving access to higher education is not quite reflected in the increase in the earning capacity of residents of the Israeli periphery. The possible reason for this is a disparity in the quality of higher education awarded by different Israeli academic colleges. Another cause can be field of study chosen by student.
We utilize in this study unique data, course of studies and salary of graduates of higher education institutions for 1999-2008 from the Israel Central Bureau of Statistics (ICBS). This dataset representing all segments of the Israeli population meaning that it constitutes a representative sample of employees (men and women) who work in all kinds of jobs. Given that we are interested in the impact of education on the labor market, we focus our attention on employed individuals in the main working age group in Israel which includes persons between the age 25 and 54 years old. Considering this age group our database consists of 80,030 individuals.
The estimation of wage equation is processed by a Heckman's sample selection model. The preliminary results indicate that the reform in higher education had a stronger positive effect on the access to higher education among periphery regions than residents of the core in Israel. Despite this, we argue that there is still a quality gap in higher education awarded by different Israeli academic colleges. In addition, there is a difference in choosing the field of education. Namely, the impact of the Academic Colleges Law is barely evident in the increased earning potential and the narrowing of the wage gap between the two investigated groups in the Israeli labor market.

Evgeniya Kolomak (p)

The Russian urban system in the post-Soviet period faces a unique set of challenges created by the interplay of two factors: the legacy of the centrally planned system; and the transition to a market economy. The evolution of the Russian urban system over the past 20 years can be regarded as a natural experiment in the transition from a “non-market” structure towards market-based spatial equilibrium. The transitional dynamics of the Russian urban system provide an opportunity to test for the multiplicity of equilibria and to test the predictions of urban economic theories explaining the shape and evolution of city size distributions.
An analysis of annual city size data for more than 1000 cities in the period of transition from a planned to a market economy in 1991-2013 shows that: 1) predictions of the rapid growth of the urban system and of primary cities due to the introduction of market forces are not confirmed; 2) the city size distribution is almost unchanged; and 3) regression estimates reveal the significance of agglomeration economies. The results are consistent with the theories of random growth, increasing returns and locational fundamentals, but provide no convincing evidence for multiple spatial equilibria.
The influence of the transitional shock on the Russian urban system was not drastic or even serious. However, market forces also influenced the evolution of Russian cities. Concentration, diversification, market size, transport and social infrastructure shaped urban structure.

Miguel Vargas (p)

The aim of this work is to study the relationship between highly-skilled workers’ segregation and productivity. This relationship is not clear at first sight. On the one hand highly-skilled workers’ spatial concentration would take advantage of agglomeration economies and cause positive spillovers amongst the most advantaged that could compensate productivity losses due the existence of low-skilled workers ghettos. On the other hand, it would be the case that those spillovers are not enough for compensating the worse-off groups’ productivity losses, and hence the aggregated productivity would be negatively affected. We found a negative and significant relationship amongst cities’ productivity and high-skilled workers segregation. However, we found evidence of a quadratic relationship between segregation and productivity as well. The latter is due to the fact that cities that are specialised in services, which are on average highly productive, do not suffer negative aspects of segregation, meanwhile those cities which are specialised on manufacture or natural resource does suffer segregation negative effects. The latter is because of production of services does not exhibit high level of complementarities between highly-skilled and low-skilled workers, hence low-skilled workers loses of productivity due to segregation do not affect cities production, but when production exhibits high levels of complementarities between highly-skilled workers and low-skilled workers, low-skilled workers' loses of productivity will have a negative impact upon cities' productivity.