Wage Trickle Down vs. Rent Trickle Down: How does increase in college graduate affect wages and rents?
نویسندگان
چکیده
This paper tests whether the impact of human capital externality differs by race, ethnicity and educational attainment. While extant studies have examined the existence of human capital externality on wages, studies have yet to explore whether the spillover benefits from college graduates are equally distributed across different groups of city residents. Using the PSID from 1980 to 2013, we find that whites gain greater wage premiums from increasing college graduates than blacks and Latinos. College graduates also gain higher earning premiums that those who received less education. These results hold even after controlling for unobserved characteristics of individuals and cities. Rental prices also increase in cities that experience growth in the share of college graduates. In fact, we find that the increase in the rent cost offsets the earnings increases, and thus the average real earnings does not change in cities with greater influxes of high skilled workers. For minorities and those without college degrees, however, the increase of rental costs outweighs the increase of earning benefits from growing share of college graduates. This suggests that minorities and people without college degrees can be worse off in cities that attract college graduates. 1 [email protected] 2 [email protected]
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