April 28, 2020
The urban rural-education gap: do cities indeed make us smarter?
Despite the existence of a large urban-rural education gap in many countries, little attention has been paid whether cities enjoy a comparative advantage in the production of human capital. Using Dutch administrative data, this paper finds that conditional on family characteristics and cognitive ability, children who grow up in urban regions consistently attain higher levels of human capital compared to children in rural regions. The elasticity of university attendance with respect to population density is 0.07, which is robust across a wide variety of specifications. Hence, the paper highlights an alternative channel to explain the rise of the city.