The Relationship between Location Choice and Earnings Inequality
This paper provides new empirical evidence about how workers’ locations affect measurements of earnings inequality (and their changes over time) in the United States. Part of the inequality observed in any given U.S. sample is due to the fact that workers with different skills (and therefore earnings) are not distributed symmetrically across locations that are more and less productive (and therefore pay higher and lower wages). In particular, I estimate that a significant and rising proportion of the college wage premium is due to college graduates living in and moving toward higher-paying locations than high school graduates. Furthermore, I assess the impact of location on real wage inequality (adjusting for local costs of living). The higher wages that college graduates enjoy as a result of their location choices are mostly counterbalanced by higher costs of living. From this, I infer that college graduates choose to live in more economically productive labor markets than do workers with less education, but college graduates are not necessarily more capable of exploiting locational wage differences for their own advantage.
|Date of creation:||21 Feb 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (757) 221-4311
Fax: (757) 221-2390
Web page: http://www.wm.edu/economics/
More information through EDIRC
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.:
- Peter McHenry, 2010.
"The Geographic Distribution of Human Capital: Measurement of Contributing Mechanisms,"
92, Department of Economics, College of William and Mary.
- Peter McHenry, 2014. "The Geographic Distribution Of Human Capital: Measurement Of Contributing Mechanisms," Journal of Regional Science, Wiley Blackwell, vol. 54(2), pages 215-248, 03.
- Edward L. Glaeser & David C. Mare, 1994.
"Cities and Skills,"
NBER Working Papers
4728, National Bureau of Economic Research, Inc.
- 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).
- 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.
- Edward L. Glaeser & Albert Saiz, 2003.
"The rise of the skilled city,"
04-2, Federal Reserve Bank of Philadelphia.
- Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," Harvard Institute of Economic Research Working Papers 2025, Harvard - Institute of Economic Research.
- Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," NBER Working Papers 10191, National Bureau of Economic Research, Inc.
- 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.
- DuMond J.M. & Hisch, B.T. & Macpherson, D.A., 1996.
"Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter?,"
1996_08_01, Department of Economics, Florida State University.
- Dumond, J Michael & Hirsch, Barry T & Macpherson, David A, 1999. "Wage Differentials across Labor Markets and Workers: Does Cost of Living Matter?," Economic Inquiry, Western Economic Association International, vol. 37(4), pages 577-98, October.
- Dan Black & Natalia Kolesnikova & Lowell Taylor, 2009.
"Earnings Functions When Wages and Prices Vary by Location,"
Journal of Labor Economics,
University of Chicago Press, vol. 27(1), pages 21-47, 01.
- 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.
- Wheeler, Christopher H., 2006.
"Cities and the growth of wages among young workers: Evidence from the NLSY,"
Journal of Urban Economics,
Elsevier, vol. 60(2), pages 162-184, September.
- 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.
- Ofer Malamud & Abigail Wozniak, 2008.
"The Impact of College Graduation on Geographic Mobility: Identifying Education Using Multiple Components of Vietnam Draft Risk,"
0811, Harris School of Public Policy Studies, University of Chicago.
- 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).
- 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.
- Christopher R. Berry & Edward L. Glaeser, 2005. "The divergence of human capital levels across cities," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 407-444, 08.
When requesting a correction, please mention this item's handle: RePEc:cwm:wpaper:112. 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 references are entirely missing, you can add them using this form.