Measuring Human Capital Divergence in a Growing Economy

Abstract

The stylized fact that the fraction of workers who are college graduates appears to increase more in US cities where the initial share is larger has attracted significant attention. Furthermore, more educated cities appear to grow faster. These two trends could portend the divergence of cities by skill, with low-skill workers segregated in slow-growing or declining cities. This paper compares measures of skill divergence and finds that relative measures, which have the property of scale invariance, show no divergence for the period from 1970 to 2010. In addition, the relation between skill intensity and city growth appears to be concave, so that growth rate differences may diminish over time as the average college share of the country rises.

Keywords: Divergence, Human Capital, Skill Ratio, Urban Growth

JEL Classification: J24, R10, R12, R23