آیا تقسیم کار محدود به وسعت بازار است؟ مدارک و شواهد از شهرهای فرانسه

This paper provides supportive evidence to the notion 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 specialists occupations are over-represented in large cities. Using census data for French cities, we find strong empirical support for this prediction.

Cities offer considerable efficiency advantages for production. This empirical observation already figured prominently in Adam Smith’s Wealth of Nations (1776) and in Alfred Marshall’s Principles (1890). Modern econometric studies confirm it. A doubling of city workforce is generally acknowledged to increase output per worker by 2–8% (see Rosenthal and Strange, 2004, for a comprehensive survey). To explain this fact, Smith (1776) put forward one specific mechanism that builds on three propositions. First, there are some efficiency benefits to the division of labour. Second, the extent of the market limits the division of labour. Third, transportation efficiency determines the extent of the market, making cities the ‘natural’ markets where the division of labour takes place.

Our paper starts from the observation that there is no immediate way to assess empirically how far the division of labour is limited by the extent of the market. Instead, we develop a model-based approach to explore this issue. Our theoretical model builds on the existence of small indivisibilities at the worker level. Its key prediction is that scarce specialist occupations should be over-represented in large cities. Using a large extract of the French census, we test this prediction successfully. We also verify that it is robust to a number of estimation issues such as measurement errors, our definition of scarcity, and alternative spatial units.