The urban-rural education gap: Do cities indeed make us smarter?

Abstract

Despite the large urban-rural education gap observed in most countries, little attention has been paid to whether cities actually enjoy a comparative advantage in the production of human capital. Using Dutch administrative data, this paper finds that children growing in urban regions consistently attain higher levels of human capital compared with children in rural regions, conditional on observed cognitive ability and various family characteristics. The elasticity of university attendance with respect to population density is 0.07, which is robust across a variety of specifications. Hence, the paper offers a different explanation to explain the recent success of cities.