The objective of this paper is to explore the relative importance of each of Marshall’s agglomeration mechanisms by examining the location of new manufacturing firms in Spain. In particular, we estimate the count of new firms by industry and location as a function of (pre-determined) local employment levels in industries that: 1) use similar workers (labor market pooling); 2) have a customer-supplier relationship (input sharing); and 3) use similar technologies (knowledge spillovers). We examine the variation in the creation of new firms across cities and across municipalities within large cities to shed light on the geographical scope of each of the three agglomeration mechanisms. We find evidence of all three agglomeration mechanisms, although their incidence differs depending on the geographical scale of the analysis.

The empirical investigation into the economic relevance of knowledge codification lacks behind the allied theoretical contributions. The article empirically examines the link between codifiable work content and code-based technologies. For this purpose, we use detailed information about the tasks that employees performed at their jobs, and the work devices assisting them, in West Germany, over a period of 27 years. The main results suggest that automation decreased both the explicit manual task content within occupations and the job security of occupations specialized in such tasks. Occupations which frequently performed explicit manual tasks were disproportionally concentrated in middle of the wage distribution, contributing to the widely-observed polarization of jobs.

We analyze the intergenerational transmission of education focusing on the interplay between family and neighborhood effects. We develop a theoretical model suggesting that both neighborhood quality and parental effort are of importance for the education attained by children. This model proposes a mechanism explaining why and how they are of importance, distinguishing between high- and low-educated parents. We then bring this model to the data using a longitudinal data set in Britain. The available information on social housing in big cities allows us to identify the role of neighbourhood in educational outcomes. We find that the better is the quality of the neighborhood, the higher is the parents’ involvement in their children’s education. A novel finding with respect to previous US studies is that family is of importance for children with highly- educated parents while it is the community that is crucial for the educational achievement of children from low-educated families.

We analyze whether local land supply is influenced by the degree of political competition, and interpret the findings as being indicative of the influence wielded by land development lobbies. We use a new database including both political and land supply data for more than 2,000 Spanish municipalities for the period 2003-2007. In Spain, land use policies are largely a local responsibility with municipalities having periodically to pass comprehensive land use plans. The main policy variable in these plans, and the one analyzed here, is the amount of land classified for potential development. We measure local political competition as the margin of victory of the incumbent government. We instrument this variable using the number of votes obtained by parties represented in local government when standing at the first national legislative elections following the re-establishment of democracy, and the number of votes they actually obtained regionally at the national legislative elections. The results indicate that stiffer political competition does indeed reduce the amount of new land designated for development. This effect is found to be most marked in suburbs, in towns with a high percent of commuters and homeowners, and in municipalities governed by the left.

The Zollverein, the 1834 customs union between independent German states, removed all internal borders. This paper investigates its economic impact focussing on urban population growth in the state of Saxony. Implications from a economic geography model are tested with a data set on town populations and location characteristics as well as an improved distance measure created with GIS techniques to include geography and infrastructure. Saxony’s Zollverein membership led to significantly higher growth for towns close to the liberalized border. The effect depended on a town’s size, was reinforced through neighboring markets and worked through influencing migration and natural increase.

This paper proposes a new explanation for Zipf’s law often observed in the top tail of city size distribution. We show that Zipf’s law can emerge if city size can be expressed as a product of multiple random factors. Each of the factors need not generate Zipf’s law by itself. The key implication is that we cannot reject a model simply because the model does not generate Zipf’s law. A single model, typically representing only one factor, may not generate Zipf’s law, but if we have many such models together as in reality, Zipf’s law may emerge.