Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297346 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2906
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
This paper studies how demographics affect aggregate labor market power, the urban wage premium and the spatial concentration of population, I develop a quantitative spatial model in which labor market competitiveness depends on the demographic composition of the local workforce, Using highly disaggregated administrative data from Germany, I find that firms have more labor market power over older workers: The labor supply elasticity decreases from more than 2 to 1 from age 20 to 64, Calibrating the model with the reduced-form elasticity estimates, I find that differences in labor supply elasticities across age groups can explain 4% of the urban wage premium and 2% of the spatial concentration of population, Demographics and skill together account for 10% of the urban wage premium and 2% of agglomeration.
Subjects: 
Monopsonistic competition
urban wage premium
demographics
Germany
spatial equilibrium
JEL: 
J11
J31
J42
R23
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6386-2
Document Type: 
Working Paper

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