Agglomerations, tasks and wage growth

Wage growth is stronger in larger cities, but this relationship holds exclusively for non-manual workers. Using rich German administrative data, I study the heterogeneity in the pecuniary value of big city experience, a measure of dynamic agglomeration economies, and its consequences for the city-size wage gap. After 15 years of work experience in Munich the cumulative earnings premium relative to a median-sized city is 15% for workers in the most manual occupations, 25% for workers in the least manual occupations and 30% for workers in the most analytical occupations. This cumulative wage premium is 3 to 5 times the magnitude of the static city-size wage gap.