Employment Location, Neighborhood Change, and Gentrification
Public Policy Institute of California
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.
Number of Pages in PDF File: 30
Keywords: neighborhood change, gentrification, employment location, commuting
JEL Classification: R11, R12, R21, R23
Date posted: August 22, 2010 ; Last revised: August 12, 2011