Paper(s) of the Day

First:

The objective of this paper is to estimate the impact of residential job accessibility on female employment probability in the metropolitan areas of Barcelona and Madrid. Following a “spatial mismatch” framework, we estimate a female employment probability equation where variables controlling for personal characteristics, residential segregation and employment potential on public transport network are included. Data used come from Microcensus 2001 of INE (National Institute of Statistics). The research focuses on the treatment of endogeneity problems and the measurement of accessibility variables. Our results show that low job accessibility in public transport negatively affects employment probability. The intensity of this effect tends to decrease with individual’s educational attainment. A higher degree of residential segregation also reduces job probability in a significant way.

Obviously, this uses data from Spanish cities, but I suspect the findings would transfer to the US. If it’s difficult to get to jobs, people (females especially) are less likely to have them, particularly if the returns to employment are low.

Second:

This paper documents that virtually all of the growth in the skilled wage premium over the 1980’s in the United States was confined to metropolitan areas. Explanations for the growth in the skilled wage premium will therefore need to take location into account…

While offering no definitive explanation, we noted earlier the possibility that technical progress in the 1980’s was both skill and urban-biased in the gains to productivity it conferred. A second explanation for the urban nature of the rising skilled wage gap comes from the positive interaction between skill and metropolitan area in the CPS regressions in Table 2. In the framework of Jovanovic and Rob (1989), skilled workers may better decrease the cost of acquiring knowledge and facilitating communication for urban than non-urban employers. A third explanation might be one of composition. Perhaps skill-intensive industries grew faster inside metropolitan areas than outside them in the 1980’s, disproportionately drawing more highly educated workers. The higher urban demand for skilled labor would then contribute to the additional premium such workers would enjoy. Distinguishing between these explanations empirically would be a useful next step.

Interesting stuff.