REFEREED ARTICLES
City of dreams (with Gianmarco Ottaviano and Diego Puga)
Journal of the European Economic Association 21(2), 2023: 690–726
Bigger cities offer more valuable experience and opportunities in exchange for higher housing costs. While higher-ability workers benefit more from bigger cities, they are not more likely to move to one. Our model of urban sorting by workers with heterogenous self-confidence and ability suggests flawed self-assessment is partly to blame. Analysis of NLSY79 data shows that, consistent with our model predictions, young workers with high self-confidence are more likely to initially locate in a big city. For more experienced workers, ability plays a stronger role in determining location choices, but the lasting impact of earlier choices dampens their incentives to move.
In search of better opportunities: sorting and agglomeration effects among young college graduates in Colombia (with Marigee Bacolod and María Marta Ferreyra)
Regional Science and Urban Economics 87, 2021
We study the sorting of workers that leads to differences in skills across cities of different sizes upon labor market entry. Using administrative data of young college graduates in Colombia, we show such sorting affects the estimation of agglomeration effects. We find a substantial effect of college city size on wages, a much larger one than that of high school or work city size. We analyze how sorting concentrates population and skill in big cities. The most talented individuals sort into big cities, primarily because they move for college and remain for work. Individuals who move for work after college to smaller cities are relatively less able than others in their college cities but become the highest earners in their destination cities. Meanwhile, those who move after college to bigger cities, though relatively talented in their college cities, are not the highest earners in their destination cities.
Does segregation matter for Latinos? (with Ingrid Gould Ellen and Justin P. Steil)
Journal of Housing Economics 40, 2018: 129–141
We estimate the effects of residential racial segregation on socio-economic outcomes for native-born Latino young adults over the past three decades. Using individual public use micro-data samples from the Census and a novel instrumental variable, we find that higher levels of metropolitan area segregation have negative effects on Latino young adults' likelihood of being either employed or in school, on the likelihood of working in a professional occupation, and on income. The negative effects of segregation are somewhat larger for Latinos than for African Americans. Controlling for Latino and white exposure to neighborhood poverty, neighbors with college degrees, and industries that saw large increases in high-skill employment explains between one half and two thirds of the association between Latino-white segregation and Latino-white gaps in outcomes.
Selection in initial and return migration: evidence from moves across Spanish cities
Journal of Urban Economics 100, 2017: 33–53
This paper investigates the contribution of migration to the sorting of more productive workers into big cities using administrative data for Spain that follow individuals over their work lives. While migrants to small cities do not exhibit selection of any type, migrants to big cities are positively selected in terms of education, occupational skills, and individual productivity as proxied by their pre-migration position in the local earnings distribution. However, not everyone benefits equally from big cities and this leads to a second round of sorting. Returnees are not only ex-ante less productive than permanent migrants, but are also those who, following the first move, have least boosted up their earnings in big cities. Low realized earnings and unemployment affect return decisions of workers who moved to big cities at younger ages in particular, suggesting that older migrants may face less uncertainty upon moving to big cities.
Learning by working in big cities (with Diego Puga)
Review of Economic Studies 84(1), 2017: 106–142
Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages from workers' current location, and learning by working in bigger cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher initial unobserved ability as reflected in fixed-effects. Instead, they obtain an immediate static premium and accumulate more valuable experience. The additional value of experience in bigger cities persists after leaving and is stronger for those with higher initial ability. This explains both the higher mean and greater dispersion of earnings in bigger cities.
Wage cyclicality: evidence from Spain using social security data
SERIEs–Journal of the Spanish Economic Association 5(2), 2014: 173–195
Using longitudinal social security data, this study finds evidence of weak real wage cyclicality in Spain throughout 1988-2011. The baseline estimate of a 0.4% increase in wages in response to a one percentage point decline in the unemployment rate lies in the lower bound of available estimates for developed countries. Wage cyclicality in a rigid labour market like Spain is mainly driven by workers under temporary contracts and newly-hired workers. I calculate the cyclicality of the net present value of wages in new matches—the relevant piece of information for firms posting vacancies, but a rarely available measure—and find that it is well approximated by the cyclicality of wages for newly-hired workers.
Race and neighborhoods in the 21st century: what does segregation mean today? (with Ingrid Gould Ellen and Katherine M. O'Regan)
Regional Science and Urban Economics 47, 2014: 138–151
Noting the decline in segregation between blacks and whites over the past several decades, some recent work argues that racial segregation is no longer a concern in the 21st century. In response, this paper revisits some of the concerns that John Quigley raised about racial segregation and neighborhoods to assess their relevance today. We note that while segregation levels between blacks and whites have certainly declined, they remain quite high; Hispanic and Asian segregation have meanwhile remained unchanged. Further, our analysis shows that the neighborhood environments of minorities continue to be highly unequal to those enjoyed by whites. Blacks and Hispanics continue to live among more disadvantaged neighbors, to have access to lower performing schools, and to be exposed to more violent crime. Further, these differences are amplified in more segregated metropolitan areas.
WORKING PAPERS
Skill allocation and urban amenities in the developing world
(with Andrii Parkhomenko and Daniel Velásquez-Cabrera)
We use individual geocoded data from Peru and document that the city-size wage premium is larger for low-skilled than for high-skilled workers, in contrast with most developed countries. We interpret this evidence using a model of location choice with private amenity goods and non-homothetic preferences. Skilled workers enjoy higher incomes and devote a higher expenditure share to amenity goods, such as private schools or middle-class neighborhoods. The supply of these amenities is subject to a fixed cost, and only sufficiently large cities have enough demand to offer them. Thus, skilled workers demand a higher wage premium to live in small cities, and the returns to working in a large city are smaller than for their unskilled counterparts. Our quantitative exercises indicate that the mechanism accounts for two-thirds of the gap in the city-size wage premium between high- and low-skilled workers.
School density and inequality in student achievement (with Petra Thiemann)
Test score gaps between high and low socioeconomic status (SES) students or from different racial backgrounds are large in the United States. We study the extent to which residential sorting within local labor markets perpetuates and amplifies these tests score gaps. Using a sample of elementary public school students in North Carolina, we document that the test score gaps between high and low SES students and between Black and white students correlate with city size (school density)—with the widest gaps in the largest cities. We then explore to what extent residential sorting within local labor markets explains this pattern. We show that assortative matching between student background and school value-added grows linearly with city size. Assortative matching accounts for 8% of the relationship between city size and test score gaps; it explains about 2% of Black-white test score gaps in large cities but only 0.2% in areas with low school density.
Not on my street! Housing and racial effects of Atlanta street name changes
(with Raphael Bostic, Jamie Chung, and Jessica Dill)
Using unique data on street name change petitions in Atlanta during the 1930s, we investigate the impact of geographic discrimination on home values and racial composition. Specifically, street name change requests seemingly associated with racial considerations allow us to measure the neighborhood impact of micro-geographic level discrimination. Using a diff-in-diff setting, we find that homes on streets that changed names experienced a price decline compared to homes on adjacent streets that did not undergo a name change. This negative pricing effect exists in the short and long term. The share of Black households and other minorities increased in the streets that requested a name change before and after the petition. We conclude that some white households tried to stop minority inflows by changing street names, but such signals were ineffective at preventing neighborhood change.
Are there upward inter-generational education spillovers on health? The influence of children education on parental smoking cessation (with Erica Field)
We examine the influence of child schooling on preventive health behaviour of parents. We look for evidence of upward intergenerational spillover effects by following a sample of 30-year-old smokers through age 50 and jointly examining changes in tobacco use and child schooling attainment. To account for the endogeneity of child schooling, we make use of variation in the cost of college attendance stemming from the uneven expansion of post-secondary schools across U.S. counties between 1946 and 1994. Results indicate that child education has a large positive effect on the rate of smoking cessation at older but not younger ages. Parents who smoke at ages 50 and 60 are 28% more likely to quit smoking in the next ten years if they have college educated children.
OTHER PUBLICATIONS & REPORTS
Los Angeles' housing crisis and local planning responses: an evaluation of inclusionary zoning and the transit-oriented communities plan as policy solutions in Los Angeles
(with Linna Zhu, Evgeny Burinskiy, Richard K. Green, and Marlon G. Boarnet)
Cityscape 23(1), 2021: 133–160
Urban revitalization: assessment methodologies and expected impacts
(with Jesús Navarrete and Isidora Larraín)
Inter-American Development Bank, Report IDB-TN-1498, 2017: 1–62
The significance of segregation in the 21st century
(with Ingrid Gould Ellen and Justin P. Steil)
City & Community 15(1), 2016: 8–13
Desvinculado y desigual: is segregation harmful to Latinos?
(with Ingrid Gould Ellen and Justin P. Steil)
The Annals of the American Academy of Political and Social Science 660(1), 2015: 57–76