30 Pages Posted: 22 Aug 2010 Last revised: 12 Aug 2011
Date Written: August 10, 2011
This paper assesses the contribution of employment location to neighborhood change and to gentrification. At the tract level, average household income change from 1990 to 2000 is positively correlated both with the change and the level of average earnings for nearby jobs. I instrument for the tract-level change in average earnings with predicted change in tract average earnings based on national industry trends, confirming a causal interpretation. The relationship between employment location and neighborhood change is strongest for tracts with slower commuting speeds, suggesting that people live nearer work where the time cost of commuting is higher.
Keywords: neighborhood change, gentrification, employment location, commuting
JEL Classification: R11, R12, R21, R23
Suggested Citation: Suggested Citation