Dynamic agglomeration effects of foreigners and natives: The role of experience in high-quality sectors, tasks and establishments

This paper analyzes how dynamic agglomeration effects differ between foreign and native workers using administrative data on individual employment biographies. According to our results, both groups benefit, on average, equally from gathering work experience in large labor markets. The exception are low-skilled foreign workers, who receive a lower premium for big city experience than low-skilled natives. Providing new evidence on the sources of dynamic agglomeration effects, we show that this difference disappears once we consider the sectors, tasks and establishments, in which foreign and native workers gather experience. More generally, our results indicate that, on average, around 50% of the return of an additional year of experience gained in the densest regions can be ascribed to the acquisition of experience in higher-quality jobs in large cities.