Jacob Spratt

Job market paper

Human Capital Spillovers and the Emergence of Smart Cities

High skill cities have become more skilled over time, an increase that has also been accompanied by greater income inequality across space and larger education premiums economy-wide. What economic forces have driven the emergence of these ``smart cities''? Using a structural model of worker migration and human capital accumulation over the life-cycle, I find that increases in the human capital spillovers, big city amenities, and heterogeneity in productivity across space are jointly responsible for the observed phenomenon. Strong complementarity between the changes overcame greater congestion stemming from population growth, giving rise to smart cities.