Income Segregation and the Rise of the Knowledge Economy

Enrico Berkes and Ruben Gaetani

American Economic Journal: Applied Economics, 2023, vol. 15, issue 2, 69-102

Abstract: We analyze the effect of an increase in knowledge-intensive activities on spatial inequality in US cities. We leverage a predetermined network of patent citations to instrument for local innovation trends. Between 1990 and 2010, a one-standard-deviation increase in patent growth increases income segregation by 0.65 Gini points, corresponding to 0.31 standard deviations of the over-time change in income segregation. This effect mainly arises from the sorting of residents by income, occupation, and education. Local shocks to innovation induce a clustering of knowledge-intensive jobs and residents, amplified by the response of rents and amenities.

JEL-codes: D31 O31 O33 O34 R23 R32 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (3)

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Working Paper: Income Segregation and Rise of the Knowledge Economy (2018)
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DOI: 10.1257/app.20210074

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