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Workings of a City: Location, Education, and Production

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  • Benabou, Roland

Abstract

The 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 Info

Article provided by MIT Press in its journal Quarterly Journal of Economics.

Volume (Year): 108 (1993)
Issue (Month): 3 (August)
Pages: 619-52

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Handle: RePEc:tpr:qjecon:v:108:y:1993:i:3:p:619-52

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  1. Miyao, Takahiro, 1978. "Dynamic Instability of a Mixed City in the Presence of Neighborhood Externalities," American Economic Review, American Economic Association, vol. 68(3), pages 454-63, June.
  2. Loury, Glenn C, 1981. "Intergenerational Transfers and the Distribution of Earnings," Econometrica, Econometric Society, vol. 49(4), pages 843-67, June.
  3. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  4. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
  5. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  6. Arnott, Richard & Rowse, John, 1987. "Peer group effects and educational attainment," Journal of Public Economics, Elsevier, vol. 32(3), pages 287-305, April.
  7. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Berglas, Eitan, 1976. "Distribution of tastes and skills and the provision of local public goods," Journal of Public Economics, Elsevier, vol. 6(4), pages 409-423, November.
  9. Dynarski, Mark & Schwab, Robert & Zampelli, Ernest, 1989. "Local characteristics and public production: The case of education," Journal of Urban Economics, Elsevier, vol. 26(2), pages 250-263, September.
  10. repec:fth:coluec:595 is not listed on IDEAS
  11. Summers, Anita A & Wolfe, Barbara L, 1977. "Do Schools Make a Difference?," American Economic Review, American Economic Association, vol. 67(4), pages 639-52, September.
  12. Henderson, Vernon & Mieszkowski, Peter & Sauvageau, Yvon, 1978. "Peer group effects and educational production functions," Journal of Public Economics, Elsevier, vol. 10(1), pages 97-106, August.
  13. Banerjee, A.V. & Besley, T., 1990. "Peer Group Externalities And The Learning Incentives: A Theory Of Nerd Behavior," Papers 68, Princeton, Woodrow Wilson School - Discussion Paper.
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