DP5087 Is the Division of Labour Limited By the Extent of the Market? Evidence from French Cities

Author(s): Gilles Duranton, Hubert Jayet
Publication Date: May 2005
Keyword(s): division of labour, extent of the market, specialization
JEL(s): J24, J44, R23
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5087

This paper provides some evidence that the division of labour is limited by the extent of the (local) market. We first propose a theoretical model. Its main prediction is that scarce occupations are over-represented in large cities. Using census data for French cities, we then provide strong empirical support for this prediction.