Demand for high-skilled workers concentrates in large cities

Abstract

Cities are skill magnets. Over the last decades college graduates have sorted themselves in large cities, resulting in growing spatial inequality. But why do high-skilled individuals increasingly move to large cities? This study utilizes online vacancies as a new data source to test the hypothesis that demand for high-skilled workers disproportionately concentrates in large cities. We advance scaling analysis by using the number of jobs instead of population size as scaling measure. Results strongly confirm our hypothesis. In general, labour demand concentrates in cities, but findings reveal significant differences between low- and high-skilled workers. Spatial concentration of demand in cities increases as skill levels increase. Demand for workers with a master’s degree disproportionally concentrates in larger cities compared to demand for workers with a high school diploma. Findings suggest that the growth of spatial inequality is connected to education and skill-levels.