| dc.description.abstract |
The predominant view in the literature is that cities affect labor productivity because spatial
proximity facilitates the transfer of ideas which make workers more productive. We also anticipate
that information technology, or IT (both equipment and labor), by facilitating human communication
and speeding up the flow of ideas and data, also contributes to enhancing the productivity of workers
within cities. Thus, workers will be more productive in cities with a large endowment of these two
factors of production. The objective of this paper is twofold. First, it describes the spatial character-
istics of IT workers in the United States. Second, it tests the hypothesis that in cities with a higher
endowment of IT workers wages (a proxy for productivity) would be higher after controlling for the
characteristics of individual workers and city-specific characteristics that also affect wages. Using data
from the 2000 US Census of Population (5% PUMS), we find evidence of a wage premium, especially
for college-educated workers, associated with living in a city that has a large concentration of IT
workers. On the basis of our findings, we propose to move the discussion on the future of cities from
the effect of IT equipment on face-to-face communication to the impact on cities of losing IT workers. |
