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Economic Brief

Oct. 9, 2018

Richmond Fed Research Addresses Inequality Among and Within Cities

Persistent increases in demand for highly skilled workers in large cities have boosted wage growth in those cities, according to the Richmond Fed’s latest Economic Brief. This trend also has contributed to greater inequality within large cities because less-skilled workers have not benefited proportionately.

These findings suggest a policy tradeoff between equality and efficiency. From the perspective of productivity and economic growth, there are potentially large gains to policies that attract highly skilled workers to large cities, but such policies would tend to make cities more unequal.

The Richmond Fed’s Economic Brief series provides web-exclusive essays on current economic issues and trends. Sign up to receive an email notification when a new essay is posted.

As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.


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