DP5087 | Is the Division of Labour Limited By the Extent of the Market? Evidence from French Cities

Publication Date

23/05/2005

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Abstract

This paper provides some evidence that the division of labour is limited by the extent of the (local) market. We first propose a theoretical model. Its main prediction is that scarce occupations are over-represented in large cities. Using census data for French cities, we then provide strong empirical support for this prediction.