Agglomeration and Jobs

  • Gilles DurantonEmail author
Living reference work entry


This chapter discusses the literature on agglomeration economies from the perspective of jobs and job dynamics. It provides a partial review of the empirical evidence on agglomeration externalities; the functionality of cities; the dynamic relationship between cities, jobs, and firms; and the linkages between cities. We provide the following conclusions. First, agglomeration effects are quantitatively important and pervasive. Second, the productive advantage of large cities is constantly eroded and needs to be sustained by new job creations and innovations. Third, this process of creative destruction in cities, which is fundamental for aggregate growth, is determined by the characteristics of urban systems and broader institutional features. We highlight important differences between developing countries and more advanced economies. A major challenge for developing countries is the transformation of their urban systems into drivers of economic growth.


Agglomeration economies Local labor markets City growth Urbanization 

jel Classification

j24 o18 r23 


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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Wharton School, University of PennsylvaniaPhiladelphiaUSA

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