By investing in urban amenities, city-level policies often aim to attract highly skilled workers. However, studies relying on revealed preferences struggle to provide causal evidence that skilled workers value urban amenities more than less skilled workers. Therefore, we use a stated-preference experiment with hypothetical job choices between two cities that differ in wages, urban amenities and economic dynamism. We find that respondents are willing to forgo a significant fraction of their wages for better urban amenities. Most strikingly, preferences do not differ systematically by skill level. Hence, the higher fraction of highly skilled workers in amenity-rich places stems from the inability of low-skilled workers to move to and afford living in their preferred locations.

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This study demonstrates the importance of accounting for correlated unobserved heterogeneity to correctly identify the relevance of career and education for fertility decisions. By exploiting individual-level life-cycle information on fertility, career and education from large administrative longitudinal datasets, this paper shows that non-linear panel models produce substantially different results than the cross-sectional approaches widely used in previous studies. Higher opportunity costs of having children are found to be associated with lower fertility within a country, while the magnitude of the adjustment differs strongly across countries. In Germany, fertility decisions are found to depend more on individual circumstances than in France, where better public childcare support enhances the compatibility between family and professional life.