Workings of a City: Location, Education, and Production
AbstractThe author models the links between residential choice, education, and productivity in a city composed of several communities. Local complementarities in human capital investment induce occupational segregation, although efficiency may require identical communities. Even when some asymmetry is optimal, equilibrium segregation can cause entire 'ghettos' to drop out of the labor force. Underemployment is more extensive the easier it is for high-skill workers to isolate themselves from others. When perfect segregation is feasible, individual incentives to pursue it are self-defeating and lead instead to a collapse of the productive sector. Copyright 1993, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 108 (1993)
Issue (Month): 3 (August)
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Other versions of this item:
- Roland Benabou, 1991. "Workings of a City: Location, Education, and Production," NBER Technical Working Papers 0113, National Bureau of Economic Research, Inc.
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