Advanced Search
MyIDEAS: Login

The Relationship between Location Choice and Earnings Inequality

Contents:

Author Info

  • Peter McHenry

    ()
    (Department of Economics, College of William and Mary)

Abstract

This paper provides new empirical evidence about how workers’ locations affect inequality in earnings and costs of living. I find that young college graduates grow up and choose to live in locations that have smaller effects on their own wages and higher costs of living, relative to locations of their less-educated peers. Consequently, young college graduates’ migration behavior actually decreases earnings inequality, at least in the short-run. In addition, college graduate movers choose destinations with higher average wages (for all workers) and tend to be more responsive to local labor demand shocks. I infer from these observations that college graduates choose to live in more economically productive labor markets than do workers with less education. I argue that young college graduates accept relatively low wages and high costs of living in exchange for local learning opportunities in large, dense cities.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://economics.wm.edu/wp/cwm_wp118.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, College of William and Mary in its series Working Papers with number 118.

as in new window
Length: 44 pages
Date of creation: 09 Apr 2012
Date of revision:
Handle: RePEc:cwm:wpaper:118

Contact details of provider:
Postal: P.O. Box 8795, Williamsburg, VA 23187-8795
Phone: (757) 221-4311
Fax: (757) 221-2390
Web page: http://www.wm.edu/economics/
More information through EDIRC

Related research

Keywords: Earnings inequality; Migration; Regional labor markets;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. DuMond J.M. & Hisch, B.T. & Macpherson, D.A., 1996. "Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?," Working Papers 1996_08_01, Department of Economics, Florida State University.
  2. Abigail Wozniak, 2010. "Are College Graduates More Responsive to Distant Labor Market Opportunities?," Journal of Human Resources, University of Wisconsin Press, vol. 45(4), pages 944-970.
  3. Peter McHenry, 2010. "The Geographic Distribution of Human Capital: Measurement of Contributing Mechanisms," Working Papers 92, Department of Economics, College of William and Mary.
  4. Christopher H. Wheeler, 2005. "Cities and the growth of wages among young workers: evidence from the NLSY," Working Papers 2005-055, Federal Reserve Bank of St. Louis.
  5. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  6. Dan Black & Natalia Kolesnikova & Lowell J. Taylor, 2007. "Earnings functions when wages and prices vary by location," Working Papers 2007-031, Federal Reserve Bank of St. Louis.
  7. Yankow, Jeffrey J., 2006. "Why do cities pay more? An empirical examination of some competing theories of the urban wage premium," Journal of Urban Economics, Elsevier, vol. 60(2), pages 139-161, September.
  8. E. D. Gould, 2007. "Cities, Workers, and Wages: A Structural Analysis of the Urban Wage Premium," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 477-506.
  9. Malamud, Ofer & Wozniak, Abigail, 2008. "The Impact of College Graduation on Geographic Mobility: Identifying Education Using Multiple Components of Vietnam Draft Risk," IZA Discussion Papers 3432, Institute for the Study of Labor (IZA).
  10. Autor, David & Dorn, David, 2009. "Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States," IZA Discussion Papers 4290, Institute for the Study of Labor (IZA).
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cwm:wpaper:118. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daifeng He) or (Alfredo Pereira).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.