Skip to Main Content

Q1-Q4

2017

Inequality Across and Within US Cities around the Turn of the Twenty-First Century

Felipe F. Schwartzman

We review key facts about inequality across and within US cities around the turn of the twenty-first century and discuss theoretical interpretations. Large cities are cities with a greater proportion of skilled workers. In those large and skill-intensive cities, wages are overall higher but are offset by higher rents. Those higher wages are particularly prevalent among high-skilled workers, so that the skill premium increases with city size and skill mix. Over the last few decades, these facts have become increasingly salient. We discuss possible explanations for these facts with the help of a canonical spatial equilibrium model. We conclude based on the model and on additional evidence collected by recent literature that these facts are most likely explained by an increase in learning externalities among high-skilled workers.

DOI: https://doi.org/10.21144/eq1030101

phone Contact Us

Lisa Kenney (804) 697-8179
Publications image

Get Our Free Publications

To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).