Young workers, learning, and agglomerations
Giovanni Peri, 2002.
Since the 90's densely populated locations, such as urban areas, have attracted a disproportionate share of young college-educated workers. We explain this stylized fact as a result of colocation due to learning externalities among educated workers. Workers learn from each other when young, increasing their skills and their productivity. Once they grow mature and their learning decreases, some of them choose to move out of densely populated areas. As skills grew more transferable thanks to computerization and flexibility in the 80s and 90s, urban areas became learning grounds for educated young workers.