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THE SKILL COMPOSITION OF U.S. CITIES *
Author(s) -
Hendricks Lutz
Publication year - 2011
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2010.00617.x
Subject(s) - metropolitan area , productivity , complement (music) , composition (language) , economics , set (abstract data type) , labour economics , fraction (chemistry) , economic geography , demographic economics , business , geography , economic growth , computer science , biochemistry , chemistry , linguistics , philosophy , archaeology , organic chemistry , complementation , programming language , gene , phenotype
This article explores why the fraction of highly educated workers varies across U.S. metropolitan areas. It documents a set of facts that pose challenges for a number of theories. Notably, (i) cities are characterized by industry neutral differences in skilled labor productivity and (ii) the size of the business services sector is strongly correlated with cities' skill compositions. Motivated by these observations, I propose an input sharing model, in which nontraded business services complement skilled labor. I show that the model accounts for all of the empirical regularities documented in the article.