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CEP discussion paper
Communication Externalities in Cities
Sylvie Charlot and Gilles Duranton
November 2003
Paper No' CEPDP0592:
Full Paper (pdf)

JEL Classification: J31; R19; R29

Tags: human capital; cities; communication externalities

To identify communication externalities in French cities, we exploit a unique survey recording workplace communication of individual workers. Our hypothesis is that in larger and/or more educated cities, workers should communicate more. In turn, more communication should have a positive effect on individual wages. By estimating both an earnings and a communication equation, we find evidence of communication externalities. Being in a larger and more educated city makes workers communicate more and in turn this has a positive effects on wages. However, only a small fraction of the overall effects of a more educated and larger city on wages percolates through this channel.