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While urban technology exerts a positive effect on rural development through knowledge spillovers, it also raises the competitive advantage of urban firms over rural firms in product market competition. Urban technology also affects the rural labour market through brain drain. Using US county-level data, we find a negative relationship between metropolitan patent counts and non-metropolitan labour market performance. Our basic calculation indicates that, between 2005 and 2015, metropolitan technological progress was associated with a relative loss of about 2.5 million non-metropolitan jobs.

The impact of metropolitan technology on the non-metropolitan labour market: evidence from US patents