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Ability sorting and consumer city

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  • Lee, Sanghoon

Abstract

This paper provides a consumption-side explanation for the urban wage premium. The paper shows that if the taste for consumption variety is a luxury good, high average wages in large cities can be due to the selection of high-skill workers choosing to live there. A unique implication is that urban wage premiums are decreasing in skills and can even be negative for very high-skill workers. I confirm this implication using data on the health care workers.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 68 (2010)
Issue (Month): 1 (July)
Pages: 20-33

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Handle: RePEc:eee:juecon:v:68:y:2010:i:1:p:20-33

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Web page: http://www.elsevier.com/locate/inca/622905

Related research

Keywords: Urban wage premium Ability sorting Consumption variety Productivity spillover Agglomeration economies Housing price;

References

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Citations

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Cited by:
  1. Teresa Schlüter, 2013. "Real Wages, Amenities and the Adjustment of Working Hours Across Regional Labour Markets," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0130, Spatial Economics Research Centre, LSE.
  2. Matthias Wrede, 2013. "Heterogeneous skills and homogeneous land: segmentation and agglomeration," Journal of Economic Geography, Oxford University Press, Oxford University Press, vol. 13(5), pages 767-798, September.
  3. Brown, W. Mark & Newbold, Bruce & Beckstead, Desmond, 2008. "Cities and Growth: In Situ Versus Migratory Human Capital Growth," The Canadian Economy in Transition, Statistics Canada, Economic Analysis 2008019e, Statistics Canada, Economic Analysis.
  4. Brown, W. Mark & Newbold, Bruce & Beckstead, Desmond, 2008. "Les villes et la croissance : croissance du capital humain migratoire et in situ," L'economie canadienne en transition, Statistics Canada, Analyse economique 2008019f, Statistics Canada, Analyse economique.
  5. Behrens, Kristian & Duranton, Gilles & Robert-Nicoud, Frédéric, 2010. "Productive cities: Sorting, selection and agglomeration," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7922, C.E.P.R. Discussion Papers.
  6. Helsley, Robert W. & Strange, William C., 2011. "Entrepreneurs and cities: Complexity, thickness and balance," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 41(6), pages 550-559.
  7. Joseph Gyourko & Christopher Mayer & Todd Sinai, 2006. "Superstar Cities," NBER Working Papers 12355, National Bureau of Economic Research, Inc.
  8. Hildegunn Stokke & Jørn Rattsø & Fredrik Carlsen, 2012. "Urban wage premium increasing with education level: Identification of agglomeration effects for Norway," ERSA conference papers, European Regional Science Association ersa12p459, European Regional Science Association.
  9. Suzanne Kok, 2014. "Matching worker skills to job tasks in the Netherlands: sorting into cities for better careers," IZA Journal of European Labor Studies, Springer, Springer, vol. 3(1), pages 1-36, December.
  10. Fredrik Carlsen & Jorn Rattso & Hildegunn E. Stokke, 2013. "Education, experience and dynamic urban wage premium," Working Paper Series, Department of Economics, Norwegian University of Science and Technology 15213, Department of Economics, Norwegian University of Science and Technology.
  11. Jordan Rappaport, 2006. "Consumption amenities and city crowdedness," Research Working Paper, Federal Reserve Bank of Kansas City RWP 06-10, Federal Reserve Bank of Kansas City.
  12. Suzanne Kok, 2013. "Matching worker skills to job tasks in the Netherlands: Sorting into cities for better careers," CPB Discussion Paper, CPB Netherlands Bureau for Economic Policy Analysis 247, CPB Netherlands Bureau for Economic Policy Analysis.
  13. Rappaport, Jordan, 2008. "Consumption amenities and city population density," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 38(6), pages 533-552, November.
  14. Rickman, Dan S., 2014. "Assessing Regional Quality of Life: A Call for Action in Regional Science," MPRA Paper 58109, University Library of Munich, Germany.

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