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Real wage inequality

Posted By Russ Roberts On March 12, 2009 @ 10:32 pm In Inequality | Comments Disabled

About half of the return to a college education over and above that of a high school education, is eaten up by higher costs of living—college grads tend to live in high wage but high cost urban areas. So says this working paper [1] by Enrico Moretti (HT: Peter St. Onge). He recognizes that the higher costs of living are partly because of higher amenities in urban areas. Clever insight. Might be important.

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[1] this working paper: http://www.econ.berkeley.edu/%7Emoretti/inequality.pdf

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