Spatial Polarization

Fabio Cerina, Elisa Dienesch, Alessio Moro and Michelle Rendall

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Abstract: We document the emergence of spatial polarization in the U.S. during the 1980-2008 period. This phenomenon is characterised by stronger employment polarization in larger cities, both at the occupational and the worker level. We quantitatively evaluate the role of technology in generating these patterns by constructing and calibrating a spatial equilibrium model. We find that faster skill-biased technological change in larger cities can account for a substantial fraction of spatial polarization in the U.S. Counterfactual exercises suggest that the differential increase in the share of low-skilled workers across city size is due mainly to the large demand by high-skilled workers for low-skilled services and to a smaller extent to the higher complementarity between low- and high-skilled workers in production relative to middle-skilled workers.

Date: 2023-01
New Economics Papers: this item is included in nep-his, nep-tid and nep-ure
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Published in The Economic Journal, 2023, 133 (649), pp.30-69. ⟨10.1093/ej/ueac040⟩

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Related works:
Journal Article: Spatial Polarisation (2023)
Working Paper: Spatial Polarization (2019)
Working Paper: Spatial Polarization (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03788208

DOI: 10.1093/ej/ueac040

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