 The Relationship between Location Choice and Earnings InequalityNo 118, Working Papers from Department of Economics, College of William and Mary Abstract: This paper provides new empirical evidence about how workers’ locations affect inequality in earnings and costs of living. I find that young college graduates grow up and choose to live in locations that have smaller effects on their own wages and higher costs of living, relative to locations of their less-educated peers. Consequently, young college graduates’ migration behavior actually decreases earnings inequality, at least in the short-run. In addition, college graduate movers choose destinations with higher average wages (for all workers) and tend to be more responsive to local labor demand shocks. I infer from these observations that college graduates choose to live in more economically productive labor markets than do workers with less education. I argue that young college graduates accept relatively low wages and high costs of living in exchange for local learning opportunities in large, dense cities. Keywords: Earnings inequality; Migration; Regional labor markets (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cwm:wpaper:118 Access Statistics for this paper More papers in Working Papers from Department of Economics, College of William and Mary Contact information at EDIRC. |
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