Theories of city formation typically revert around agglomeration externalities driven by returns to specialization. Using survey data from Nepal, we test these theories by examining the relationship between proximity to urban centers and the organization of labor. We show that wards located in...

This paper examines how economic activity and market participation are distributed across space. Applying a non-parametric von Thünen model to Nepalese data, we uncover a strong spatial division of labor. Non-farm employment is heavily concentrated in and around cities while agricultural wage...