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Spatial Sorting and Inequality

Author

Listed:
  • Cecile Gaubert

    (Department of Economics, University of California, Berkeley, California, USA)

  • Rebecca Diamond

    (Department of Economics, Stanford University, Stanford, California, USA)

Abstract

The spatial segregation of college-educated and non-college-educated workers between commuting zones in the United States has steadily grown since 1980. We summarize prior work on sorting and location and document new descriptive patterns on how sorting and locations have changed over the past four decades. We find that there has been a shift in the sorting of college-educated workers from cities centered primarily around production in 1980 to cities centered around consumption by 2017. We develop a spatial equilibrium model to understand these patterns and highlight key places where further research is needed. Our framework helps understand the causes and consequences of changes in spatial sorting; their impact on inequality; and how they respond to, and feed into, the changing nature of cities.

Suggested Citation

  • Cecile Gaubert & Rebecca Diamond, 2022. "Spatial Sorting and Inequality," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 795-819, August.
  • Handle: RePEc:anr:reveco:v:14:y:2022:p:795-819
    DOI: 10.1146/annurev-economics-051420-110839
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    Citations

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    Cited by:

    1. Chen, Natalie & Novy, Dennis & , Perroni, Carlo & Chern Wong, Horng Chern, 2023. "Urban-Biased Structural Change," The Warwick Economics Research Paper Series (TWERPS) 1484, University of Warwick, Department of Economics.
    2. Clémence Berson & Pierre-Philippe Combes & Laurent Gobillon & Aurélie Sotura, 2023. "Time-Varying Agglomeration Economies and Aggregate Wage Growth," SciencePo Working papers hal-04346733, HAL.
    3. Gehr, Katja & Pflüger, Michael P., 2023. "The Worth of Cities in Germany," IZA Discussion Papers 16127, Institute of Labor Economics (IZA).
    4. Gokan,Toshitaka & Kichko,Sergei & Matheson,Jesse A & Thisse,Jacques-François, 2022. "How the rise of teleworking will reshape labor markets and cities?," IDE Discussion Papers 868, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Katheryn Russ & Jay C. Shambaugh & Sanjay R. Singh, 2023. "Currency Areas, Labor Markets, and Regional Cyclical Sensitivity," NBER Working Papers 31519, National Bureau of Economic Research, Inc.
    6. Perl, Maximilian, 2023. "Agglomerations, tasks and wage growth," Ruhr Economic Papers 999, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Marko Köthenbürger & Costanza Naguib & Christian Stettler & Michael Stimmelmayr, 2023. "Income Taxes and the Mobility of the Rich: Evidence from US and UK Households in Switzerland," CESifo Working Paper Series 10376, CESifo.

    More about this item

    Keywords

    inequality; agglomeration; sorting; location choice;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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