URBAN ECONOMICS:

USC Price Professor Jorge De la Roca wins international dissertation prize

November 7, 2018
Jorge De la Roca, assistant professor at the USC Price School

Jorge De la Roca, assistant professor at the USC Price School

By Cristy Lytal

If you’ve ever felt the allure of the big city, you’d do well not to resist. If people spend at least part of their careers in a big city, they tend to make more money, which economists equate with being more productive. And this boost in wages and productivity tends to persist, even if workers later relocate to smaller towns, according to research by Jorge De la Roca, an assistant professor at the USC Price School of Public Policy.

For this intriguing research, conducted as his PhD dissertation and titled “Migration, Self-Selection, and Learning in Cities,” De la Roca won the 2018 August Lösch Prize. Named for one of the founders of modern Regional Science, the prize recognizes outstanding research in the field, and confers a 4,000 Euro award. The August Lösch Association and the City of Heidenheim, Germany, presented the award at the European Regional Science Association’s GfR Summer Conference on Borders and Regional Development, held this September in Berlin.

“The prize tries to identify and target young scholars,” De la Roca said. “The most important thing is that the early winners have become prominent scholars in the field.”

De la Roca grew up in Lima, Peru, and pursued his undergraduate degree in economics at the Universidad del Pacífico. After graduation, he worked at a think tank called the Group for the Analysis of Development in Lima, at Harvard University’s Center for International Development in Cambridge, Massachusetts, and at the International Food Policy Research Institute in Washington, D.C. These experiences inspired him to pursue his MPhil in economics and finance at the Center for Monetary and Financial Studies (CEMFI) in Madrid, Spain.

“The funny part is that I always was curious about cities and urban issues,” De la Roca said. “Despite that, I never took a course.”

Big City, Bright Future

This changed during his PhD studies at CEMFI, when he took his first class in urban economics with Professor Diego Puga. De la Roca had found his calling. He began delving into Spain’s social security data.

“We realized that we had this very powerful tool for Spain where we can follow workers as they start their careers and move across cities across the entire country,” he said. “We wanted to see how much more productive we become when we are in a big place.”

Because the data set was so extensive, De la Roca could compare workers with similar characteristics within industries. Workers made more money, considered an indicator of higher productivity, when they lived in big cities — and they continued to do so when they subsequently moved to smaller towns.

“This experience that you have acquired is portable, which suggests that there is a learning mechanism,” De la Roca said. “Part of the advantage of moving to big cities is that you learn something there.”

Encourage Mobility

These findings carry important policy implications at a time when mobility is decreasing in the United States.

“Big cities are not as big as they should be sometimes, or we’re not letting these people move into these bigger cities, which would make the country more productive as a whole,” De la Roca said. “And part of it is because we are artificially not increasing supply. We don’t want to build more housing in L.A., period. San Francisco doesn’t want more housing, period. But those are the places where you should induce people to move, at least for some time in their careers.”

Richard K. Green, chair of the Department of Policy Analysis and Real Estate, praised De la Roca’s “intellectual heft” and called his research “so good that it raises our profile among our peers.”

Green added, “This dissertation is really interesting, and it demonstrates how much impact urbanization has on productivity.”

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