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@techreport{LaborHubDP1,
 title = "Location Effects or Sorting? Evidence from Firm Relocation",
 author = "Carry, Pauline and Kleinman, Benny and Nimier-David, Elio",
 institution = "Cornell University ILR School",
 type = "Discussion Paper",
 series = "Labor Hub Discussion Paper Series",
 number = "1",
 year = "2026",
 month = "September",
 URL = "https://laborhub.ilr.cornell.edu/publications/3/",
 abstract = {What role do firms play in geographic wage disparities? This paper exploits
establishment mobility as a novel source of identification to separate firm sorting
from location treatment effects, i.e., the local wage premium for a given worker at
a given firm (due to, e.g., geography, infrastructure, amenities). Using data from
France and the U.S., we first document key facts about establishment relocation:
4% of establishments move each year, retaining their activity and structure while
adjusting their workforce and wages. Combining establishment and worker mobility
in France, we estimate a model that decomposes wage variation due to workers, firms,
and locations. Spatial wage differences are primarily driven by sorting: worker
composition accounts for 30%, firm composition for 17%, and their co-location
for 34%. Residual location effects explain only 2–4%. Establishment sorting also
accounts for most of the urban wage premium and the higher wage growth in larger
cities.},
}