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

Lena Edlund (), Cecilia Machado and Maria Sviatschi ()
Additional contact information
Lena Edlund: Columbia University
Maria Sviatschi: Columbia University

No 9502, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In 1980, housing prices in the main US cities rose with distance to the city center. By 2010, that relationship had reversed. We propose that this development can be traced to greater labor supply of high-income households through reduced tolerance for commuting. In a tract-level data set covering the 27 largest US cities, years 1980-2010, we employ a city-level Bartik demand shifter for skilled labor and find support for our hypothesis: full-time skilled workers favor proximity to the city center and their increased presence can account for the observed price changes, notably the rising price premium commanded by centrality.

Keywords: gentrification; returns to skill; time use; location choice (search for similar items in EconPapers)
JEL-codes: R21 R30 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2015-11
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Working Paper: Bright Minds, Big Rent: Gentrification and the Rising Returns to Skill (2016)
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