Skills are concentrated in big cities, says study

The challenge of skilling India’s youth is well-acknowledged. But within this challenge lies the issue of significant geographic disparity of India’s skills.
High-skilled and high-paying jobs are heavily concentrated in larger cities and metropolitan areas of India, according to a new National Bureau of Economic Research paper authored by Jonathan Dingel of University of Chicago’s Booth School of Business and others.
The paper maps the distribution of skills across and within cities in three large developing economies—Brazil, China and India—and tries to assess whether skills in developing economies follow spatial patterns similar to those found in developed economies, where skills are largely concentrated in urban areas.

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To do so, the authors first combine satellite imagery of lights at night with administrative spatial units to define metropolitan areas.
For each country, the authors then characterize the distribution of skill across these metropolitan areas using four levels of educational attainment with skills defined by education levels.
For instance, in India, the authors identify the shares of population across four education categories —illiterate, primary educated, secondary educated and college graduates—living in metropolitan areas.
They find that larger cities are more skill-abundant and pay a higher premium on wages for these higher skills. Generally speaking, larger cities attract more educated people, not just those with advanced college degrees, but also those with higher primary and secondary education. In the case of Brazil and China, the authors also find that more skilled residents live closer to the city centre.