Gentrification and the Rising Returns to Skill

70 Pages Posted: 16 Nov 2015 Last revised: 17 May 2023

See all articles by Lena Edlund

Lena Edlund

Columbia University - Graduate School of Arts and Sciences, Department of Economics

Cecilia Machado

Getulio Vargas Foundation (FGV)

María Micaela Sviatschi

Princeton University

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Date Written: November 2015

Abstract

In 1980, housing prices in large US cities rose with distance from the city center. By 2010, that relationship had reversed. We propose that the inversion can be traced to more hours worked by the skilled. Scarce non-market time downgrades the importance of residential space and upgrades that of proximity to work, factors favoring the central-city location. Geo- coded census micro data covering the 27 largest US cities and the period 1980-2010 support our hypothesis: full-time skilled workers are more likely to locate in the city center and their growth can account for the observed price changes.

Suggested Citation

Edlund, Lena and Machado, Cecilia and Sviatschi, María Micaela, Gentrification and the Rising Returns to Skill (November 2015). NBER Working Paper No. w21729, Available at SSRN: https://ssrn.com/abstract=2691247

Lena Edlund (Contact Author)

Columbia University - Graduate School of Arts and Sciences, Department of Economics ( email )

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Cecilia Machado

Getulio Vargas Foundation (FGV) ( email )

R. Dr. Neto de Araujo 320 cj 1307
Rio de Janeiro, Rio de Janeiro 22250-900
Brazil

María Micaela Sviatschi

Princeton University ( email )

Princeton, NJ 08544-1021
United States
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08540 (Fax)

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