Working Paper: NBER ID: w21729
Authors: Lena Edlund; Cecilia Machado; Maria Micaela Sviatschi
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.
Keywords: gentrification; housing prices; skilled labor
JEL Codes: R21; R30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increase in skilled labor demand (J24) | rising housing prices (R31) |
| Bartik demand shifter (J29) | increase in skilled labor demand (J24) |
| increase in skilled labor demand (J24) | gentrification (R23) |
| increase in skilled labor demand (J24) | increase in housing prices (R31) |
| Bartik demand shifter (J29) | rising housing prices (R31) |
| increase in skilled labor demand (J24) | demand for housing in the city center (R21) |
| gentrification (R23) | increase in housing prices (R31) |