Ability sorting and consumer city

Sanghoon Lee

Journal of Urban Economics, 2010, vol. 68, issue 1, 20-33

Abstract: This paper provides a consumption-side explanation for the urban wage premium. The paper shows that if the taste for consumption variety is a luxury good, high average wages in large cities can be due to the selection of high-skill workers choosing to live there. A unique implication is that urban wage premiums are decreasing in skills and can even be negative for very high-skill workers. I confirm this implication using data on the health care workers.

Keywords: Urban; wage; premium; Ability; sorting; Consumption; variety; Productivity; spillover; Agglomeration; economies; Housing; price (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (75)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:68:y:2010:i:1:p:20-33

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