Why Does Skill Intensity Vary Across Cities? Housing Cost and True Human Capital

Anthony Yezer and Daniel Broxterman ()

Working Papers from The George Washington University, Institute for International Economic Policy

Abstract: The skill intensity ratio (SIR) varies across cities. This variation education has implications for economic research. Black, Kolesnikova, and Taylor (2009) demonstrate that estimated returns to education vary with housing cost. However, if differences in the SIR are caused by variation in housing cost, the same mechanism may cause variation in unobserved worker characteristics that contribute to productivity and higher wages. Theory and tests in this paper demonstrate a substantial effect of housing cost on the SIR implying that unobserved productivity is also associated with housing cost.

Keywords: skill intensity; agglomeration; returns to education; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014
New Economics Papers: this item is included in nep-for and nep-mac
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gwi:wpaper:2014-15

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