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Gentrification and the Rising Returns to Skill

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  • Lena Edlund
  • Cecilia Machado
  • Maria Micaela Sviatschi

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, 2015. "Gentrification and the Rising Returns to Skill," NBER Working Papers 21729, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21729
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    Cited by:

    1. Vuuren, Aico van, 2018. "City structure and the location of young college graduates," Journal of Urban Economics, Elsevier, vol. 104(C), pages 1-15.
    2. Richard Florida & Charlotta Mellander & Kevin Stolarick, 2016. "Human capital in cities and suburbs," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(1), pages 91-123, July.
    3. Alexander N. Bogin & William M. Doerner & William D. Larson, 2016. "Local House Price Growth Accelerations," FHFA Staff Working Papers 16-02, Federal Housing Finance Agency.
    4. Jackelyn Hwang & Jeffrey Lin, 2016. "What Have We Learned About the Causes of Recent Gentrification?," Working Papers 16-20, Federal Reserve Bank of Philadelphia.
    5. Arthur Acolin & Scott Bernstein & Susan Wachter, 2017. "Opportunity, Housing Access, and Infrastructure," Housing Policy Debate, Taylor & Francis Journals, vol. 27(3), pages 468-471, May.
    6. Behrens, Kristian & Boualam, Brahim & Martin, Julien & Mayneris, Florian, 2018. "Gentrification and pioneer businesses," CEPR Discussion Papers 13296, C.E.P.R. Discussion Papers.
    7. Alexander N. Bogin & William M. Doerner & William D. Larson, 2019. "Local House Price Paths: Accelerations, Declines, and Recoveries," The Journal of Real Estate Finance and Economics, Springer, vol. 58(2), pages 201-222, February.
    8. Leah Platt Boustan & Robert A. Margo & Matthew M. Miller & James M. Reeves & Justin P. Steil, 2019. "Does Condominium Development Lead to Gentrification?," NBER Working Papers 26170, National Bureau of Economic Research, Inc.
    9. Behrens, Kristian & Kichko, Sergey & Thisse, Jacques-François, 2021. "Working from home: Too much of a good thing?," CEPR Discussion Papers 15669, C.E.P.R. Discussion Papers.
    10. Baum-Snow, Nathaniel & Hartley, Daniel, 2020. "Accounting for central neighborhood change, 1980–2010," Journal of Urban Economics, Elsevier, vol. 117(C).
    11. Jeffrey Lin, 2017. "Understanding Gentrification’s Causes," Economic Insights, Federal Reserve Bank of Philadelphia, vol. 2(3), pages 9-17, July.
    12. Meltzer, Rachel & Ghorbani, Pooya, 2017. "Does gentrification increase employment opportunities in low-income neighborhoods?," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 52-73.

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    More about this item

    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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