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Why Does Skill Intensity Vary Across Cities? Housing Cost and True Human Capital

Author

Listed:
  • Anthony M. Yezer

    () (Department of Economics/Institute for International Economic Policy, George Washington University)

  • Daniel A. Broxterman

    (Department of Economics/Institute for International Economic Policy, George Washington University)

Abstract

The skill intensity ratio (SIR) varies across cities. This variation education has implications for economic research. Black, Kolesnikova, and Taylor (2009) demonstrate that estimated returns to education vary with housing cost. However, if differences in the SIR are caused by variation in housing cost, the same mechanism may cause variation in unobserved worker characteristics that contribute to productivity and higher wages. Theory and tests in this paper demonstrate a substantial effect of housing cost on the SIR implying that unobserved productivity is also associated with housing cost.

Suggested Citation

  • Anthony M. Yezer & Daniel A. Broxterman, 2014. "Why Does Skill Intensity Vary Across Cities? Housing Cost and True Human Capital," Working Papers 2014-15, The George Washington University, Institute for International Economic Policy.
  • Handle: RePEc:gwi:wpaper:2014-15
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    File URL: http://www.gwu.edu/~iiep/assets/docs/papers/2014WP/YezerIIEPWP201415.pdf
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    References listed on IDEAS

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    Cited by:

    1. Mihaela SIMIONESCU, 2015. "The Evaluation of Global Accuracy of Romanian Inflation Rate Predictions Using Mahalanobis Distance," Management Dynamics in the Knowledge Economy Journal, College of Management, National University of Political Studies and Public Administration, vol. 3(1), pages 133-149, March.
    2. Dovern, Jonas & Feldkircher, Martin & Huber, Florian, 2016. "Does joint modelling of the world economy pay off? Evaluating global forecasts from a Bayesian GVAR," Journal of Economic Dynamics and Control, Elsevier, vol. 70(C), pages 86-100.

    More about this item

    Keywords

    skill intensity; agglomeration; returns to education; unobserved heterogeneity;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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