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Inequality and City Size

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Author Info

  • Nathaniel Baum-Snow

    (Brown University and NBER)

  • Ronni Pavan

    (Royal Holloway, University of London)

Abstract

A strong positive monotonic relationship between wage inequality and city size developed between 1979 and 2007 in the United States. After accounting for differences in skill composition across cities of different sizes, we find that at least 23% of the nationwide increase in the variance of log hourly wages is explained by the more rapid growth in wage inequality in larger locations than in smaller locations. This influence occurred throughout the wage distribution, was most prevalent during the 1990s, and was mostly driven by more rapid growth in within-skill-group inequality in larger cities. © 2013 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 Review of Economics and Statistics.

Volume (Year): 95 (2013)
Issue (Month): 5 (December)
Pages: 1535-1548

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Handle: RePEc:tpr:restat:v:95:y:2013:i:5:p:1535-1548

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Web page: http://mitpress.mit.edu/journals/

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Related research

Keywords: inequality; city size; wage distribution;

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Cited by:
  1. Wrede, Matthias, 2012. "Heterogeneous skills and homogeneous land: Segmentation and agglomeration," IWQW Discussion Paper Series, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW) 04/2012, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  2. 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.
  3. Florida , Richard & Mellander , Charlotta, 2013. "The Geography of Inequality: Difference and Determinants of Wage and Income Inequality across US Metros," Working Paper Series in Economics and Institutions of Innovation, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies 304, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  4. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent & Roux, Sébastien, 2012. "Sorting and local wage and skill distributions in France," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(6), pages 913-930.
  5. 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.
  6. Gerald Carlino & William R. Kerr, 2014. "Agglomeration and Innovation," Harvard Business School Working Papers, Harvard Business School 15-007, Harvard Business School.
  7. Kohei Nagamachi, 2012. "Comparative Advantage and Skill Premium of Regions," CIRJE F-Series, CIRJE, Faculty of Economics, University of Tokyo CIRJE-F-868, CIRJE, Faculty of Economics, University of Tokyo.
  8. Dionissi Aliprantis, 2013. "Covariates and causal effects: the problem of context," Working Paper, Federal Reserve Bank of Cleveland 1310, Federal Reserve Bank of Cleveland.
  9. Yip, Chi Man, 2011. "Size and The City: Productivity, Match Quality and Wage Inequality," MPRA Paper 31255, University Library of Munich, Germany.
  10. Donald R. Davis & Jonathan I. Dingel, 2012. "A Spatial Knowledge Economy," NBER Working Papers 18188, National Bureau of Economic Research, Inc.
  11. Pokrovsky Dmitry & Behrens Kristian & Zhelobodko Evgeny, 2014. "Market Size, Entrepreneurship, and Income Inequality," EERC Working Paper Series, EERC Research Network, Russia and CIS 14/01e, EERC Research Network, Russia and CIS.

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