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

Citation Type: Working Paper

Publication Year: 2015

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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.

Url: http://www.nber.org/papers/w21729

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Authors: Edlund, Lena; Machado, Cecilia; Sviatchi, Michaela

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Publication Number: 21729

Institution: NBER

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Publisher Location: Cambridge, MA

Data Collections: IPUMS USA

Topics: Housing and Segregation, Labor Force and Occupational Structure

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