JUE Insights: The Role of Establishment Size in the City-Size Premium (with Charly Porcher and Hannah Rubinton) - Journal of Urban Economics, 2023 

Abstract: Both large establishments and large cities are known to offer workers an earnings premium. In this paper, we show that these two premia are closely linked by documenting a new fact: when workers move to a large city, they also move to larger establishments. We then ask how much of the city-size earnings premium can be attributed to transitions to larger and better-paying establishments. Using administrative data from Spain, we find that 38 percent of the city-size earnings premium can be explained by establishment-size composition. Most of the gains from the transition to larger establishments realize in the short-term upon moving to the large city. Establishment size explains 29 percent of the short-term gains, but only 5 percent of the medium-term gains that accrue as workers gain experience in the large city. The small contribution to the medium-term gains is due to two facts: first, within large cities workers transition to large establishments only slightly faster than in smaller cities; second, the relationship between earnings and establishment size is weaker in large cities.

Working papers

Small Teams in Big Cities: Are Technology Differences Across Cities Optimal?  - revise & resubmit at American Economic Journal: Macroeconomics  

Abstract: Larger cities offer higher earnings and a smaller span of control, that is, fewer workers per manager. This suggests a technological trade-off between higher productivity and the ability to expand the span of control. I characterize the trade-off for a set of US cities by estimating a spatial model of production hierarchies. In high-productivity cities, production problems are more difficult and costly to communicate. As a result, cities find it optimal to locate on different points of a technology frontier. I quantify the effect of homogenizing technology vertically, bringing cities to the frontier, and horizontally, moving cities along the frontier.