Urban Inequality

63 Pages Posted: 23 Oct 2008 Last revised: 18 Sep 2014

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Matthew Resseger

Harvard University - Harvard Faculty of Arts and Sciences

Kristina Tobio

Harvard Business School

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Date Written: October 2008

Abstract

What impact does inequality have on metropolitan areas? Crime rates are higher in places with more inequality, and people in unequal cities are more likely to say that they are unhappy. There is also a negative association between local inequality and the growth of both income and population, once we control for the initial distribution of skills. What determines the degree of inequality across metropolitan areas? Twenty years ago, metropolitan inequality was strongly associated with poverty, but today, inequality is more strongly linked to the presence of the wealthy. Inequality in skills can explain about one third of the variation in income inequality, and that skill inequality is itself explained by historical schooling patterns and immigration. There are also substantial differences in the returns to skill, related to local concentrations in different industries, and these too are strongly correlated with inequality.

Suggested Citation

Glaeser, Edward L. and Resseger, Matthew and Tobio, Kristina, Urban Inequality (October 2008). NBER Working Paper No. w14419. Available at SSRN: https://ssrn.com/abstract=1288418

Edward L. Glaeser (Contact Author)

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Matthew Resseger

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Kristina Tobio

Harvard Business School ( email )

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