Wednesday, October 10, 2018

"Inequality in and across Cities"

by Bill McBride on 10/10/2018 05:55:00 PM

An interesting article by Jessie Romero and Felipe F. Schwartzman at the Richmond Fed: Inequality in and across Cities

Inequality in the United States has an important spatial component. More-skilled workers tend to live in larger cities where they earn higher wages. Less-skilled workers make lower wages and do not experience similar gains even when they live in those cities. This dynamic implies that larger cities are also more unequal. These relationships appear to have become more pronounced as inequality has increased. The evidence points to externalities among high-skilled workers as a significant contributor to those patterns.