Does IT Lead to Urban Agglomeration of Jobs?

Cities have been an important part of the modern economic system where a massive number of people work together to produce diverse goods and services. Some predicted that information technology (IT) would fundamentally change the spatial organization of jobs by eliminating the effects of physical distance. As a result, the “IT revolution” was expected to decrease the advantages of cities. However, cities have prospered despite the rapid technological changes over the past two decades. This study investigates the effect of IT on urban agglomeration from a coordination perspective. Specifically, we examine how IT affects workers’ locations by changing the nature of their jobs and how this effect is moderated by occupational characteristics. We empirically validate our arguments by using occupational-level data from US. This study contributes to the literature on agglomeration economies and routine-biased technical changes by demonstrating that IT facilitates urban agglomeration of jobs, especially for high-skilled workers