Earnings Functions When Wages and Prices Vary by Location

• 成果类型: Article
• 署名作者: Black, Dan; Kolesnikova, Natalia; Taylor, Lowell
• 署名单位: University of Chicago; Federal Reserve System - USA; Federal Reserve Bank - St. Louis; Carnegie Mellon University
• 刊物名称: JOURNAL OF LABOR ECONOMICS
• ISSN/ISSBN: 0734-306X
• DOI: 10.1086/592950
• 发表日期: 2009
• 页码: 21-47
• 关键词: returns; QUALITY; population; Amenities; migration; demand; LIFE

摘要

Economists generally assume, implicitly, that the return to schooling is invariant across local labor markets. We demonstrate that this outcome pertains if and only if preferences are homothetic-a special case that seems unlikely. Our theory predicts that returns to education will instead be relatively low in expensive high-amenity locations. Our analysis of U. S. data provides support for this contention; returns to college are especially low in such cities as San Francisco and Seattle. Our findings call into question standard empirical exercises in labor economics that treat the returns to education as a single parameter.