The Divergence of Human Capital Levels across Cities

Christopher R. Berry and Edward L. Glaeser

No 2091, Harvard Institute of Economic Research Working Papers from Harvard - Institute of Economic Research

Abstract: Over the past 30 years, the share of adult populations with college degrees increased more in cities with higher initial schooling levels than in initially less educated places. This tendency appears to be driven by shifts in labor demand as there is an increasing wage premium for skilled people working in skilled cities. In this paper, we present a model where the clustering of skilled people in metropolitan areas is driven by the tendency of skilled entrepreneurs to innovate in ways that employ other skilled people and by the elasticity of housing supply.

Date: Written 2005
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