American Economic Review Vol. 106 No. 3 2016
The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980–2000
Abstract
From 1980 to 2000, the rise in the US college/high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage, high rent cities. This paper estimates a structural spatial equilibrium model to determine causes and welfare consequences of this increased skill sorting. While local labor demand changes fundamentally caused the increased skill sorting, it was further fueled by endogenous increases in amenities within higher skill cities. Changes in cities' wages, rents, and endogenous amenities increased inequality between high school and college graduates by more than suggested by the increase in the college wage gap alone.
- DOI
- 10.1257/aer.20131706
- Volume
- 106
- Issue
- 3
- Pages
- 479-524
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref