Urban Inequality

Abstract

What impact does inequality have on metropolitan areas? Crime rates are higher in places with more inequality, and people in unequal cities are more likely to say that they are unhappy. There is also a negative association between local inequality and the growth of both income and population, once we control for the initial distribution of skills. What determines the degree of inequality across metropolitan areas? Twenty years ago, metropolitan inequality was strongly associated with poverty, but today, inequality is more strongly linked to the presence of the wealthy. Inequality in skills can explain about one third of the variation in income inequality, and that skill inequality is itself explained by historical schooling patterns and immigration. There are also substantial differences in the returns to skill, related to local concentrations in different industries, and these too are strongly correlated with inequality.

Income Inequality, Human Capital, and Income Growth: Evidence from a State-Level VAR Analysis

“…A key contention from urban researchers is that dense places tend to be more unequal (see for example, Glaeser et al 2008). This, in part, follows from the finding that workers in densely populated metro areas tend to earn higher wages than workers with the same observable characteristics living outside metro areas.…”

Race, Place, and the Persisting Income Divide in the U.S. Southeast, 2000–2014

“…Minorities, and often immigrants, often possess limited skills that put them at greater disadvantage compared to the natives in a host country (Pink‐Harper ). Further, institutional racism and discrimination also devalue their skills, which pushes them into low‐wage jobs (Clark ; Coleman ; Glaeser, Resseger, and Tobio ; Hamoudi and Sachs ; Passel and Cohn ; Porter ).…”

“…San Francisco, Miami, Boston, Washington, D.C., New York, Oakland, Chicago, and Los Angeles are some of the most expensive cities in USA. When average urban incomes are adjusted for the higher rents and costs of living, the middle classes in metropolises such as New York, Los Angeles, Portland, Miami, and San Francisco have the lowest real earnings of any metropolitan area in the U.S. (Glaeser, Resseger, and Tobio ; Long ).…”

“…About 20 years ago, metropolitan inequality was strongly associated with poverty, but today, inequality is more strongly linked to the presence of the wealthy (Glaeser, Resseger, and Tobio ). The largest cities not only attract billionaires, but they also attract huge numbers of immigrants who earn lower incomes compared to native‐born residents (Long ).…”

“…Other studies on U.S. income inequality have focused on labor market changes, including increased returns to skill, experience, and education (Murphy, Riddell, and Romer ), and changing demographics. The Midwest, known for its growth due to manufacturing for a long time, also experienced some of the largest increases in income inequality and poverty after the 1970s economic restructuring; in contrast, the Great Plains states experienced the smallest increases in inequality as there was no defining moment in their local or regional economic base (Glaeser, Resseger, and Tobio ; Long ).…”