Does it take extra skills to work in a large city?

Abstract

This paper explores the relationship between job complexity and agglomeration. For this, we assess whether vacancies in larger cities require more skills than vacancies for similar jobs elsewhere. The use of online job vacancy data allows us to empirically analyse the spatial variation in skill requirements within occupations. Results show that jobs in dense areas require extra skills compared to similar jobs in sparsely populated areas. Moreover, we show that jobs in large cities require a more diverse skill set. This indicates that urban jobs are more complex. These findings help explain the productivity premium of cities and spatial inequalities between urban and rural labour markets.