E. Dienesch and
Fabio Cerina ()
Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia
We document the emergence of spatial polarization in the U.S. during the 1980-2008 period. This phenomenon is characterized by two facts - i) employment polarization is stronger in larger relative to smaller cities and it is mainly driven by heads rather than hours; and ii) while the skill distribution of cities is remarkably similar across city-size until 1980, after that date larger cities experience a faster increase in the share of both high- and low-skilled workers and a faster decline in the share of middle- skilled ones, i.e. the skill distribution of larger cities becomes "fatter" with respect to smaller cities. We quantitatively evaluate the role of technology in generating these patterns by using a spatial general equilibrium model, and find that faster skill-biased technological change in larger cities can account for a substantial fraction of spatial polarization in the U.S. Counterfactual excercises suggest that the differential increase in the share of low-skilled workers across city size is due, in similar proportions, to both the large demand by high-skilled workers for low-skilled services, and the higher complementarity between low- and high-skilled workers in production, relative to middle-skilled.
Keywords: Spatial Sorting; Employment Polarization; City Sizes (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:201909
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