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Bright Minds, Big Rent: Gentrification and the Rising Returns to Skill

Author

Listed:
  • Lena Edlund

    (Columbia University)

  • Cecilia Machado

    (Getulio Vargas Foundation)

  • Maria Micaela Sviatschi

    (Princeton University)

Abstract

In 1980, housing prices in large US cities rose with distance from the city center. By 2010, that relationship had reversed. We propose that the inversion can be traced to more hours worked by the skilled. Scarce non-market time downgrades the importance of residential space and upgrades that of proximity to work, factors favoring the central-city location. Geo- coded census micro data covering the 27 largest US cities and the period 1980-2010 support our hypothesis: full-time skilled workers are more likely to locate in the city center and their growth can account for the observed price changes.

Suggested Citation

  • Lena Edlund & Cecilia Machado & Maria Micaela Sviatschi, 2019. "Bright Minds, Big Rent: Gentrification and the Rising Returns to Skill," Working Papers 2019-32, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2019-32
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    File URL: https://www.nber.org/system/files/working_papers/w21729/w21729.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Gentrification; suburbanization; returns to skill; labor supply; location choice;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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