TY - JOUR
T1 - Workings of a city
T2 - location, education, and production
AU - Benabou, Roland
N1 - Funding Information:
*I wish to thank Olivier Blanchard, Patrick Bolton, Charles De Bartolome, Peter Diamond, Oliver Hart, John Heaton, Kiminori Matsuyama, James Rauch, Jerome Rothenberg, Jean Tirole, William Wheaton, and especially Julio Rotemberg for helpful comments. Financial support from the National Science Foundation is gratefully acknowledged. Any errors are my own.
PY - 1993/8
Y1 - 1993/8
N2 - We model the links between residential choice, education, and productivity in a city composed of several communities. Local complementarities in human capital investment induce occupational segregation, although efficiency may require identical communities. Even when some asymmetry is optimal, equilibrium segregation can cause entire “ghettos” to drop out of the labor force. Underemployment is more extensive, the easier it is for high-skill workers to isolate themselves from others. When perfect segregation is feasible, individual incentives to pursue it are self-defeating and lead instead to a collapse of the productive sector.
AB - We model the links between residential choice, education, and productivity in a city composed of several communities. Local complementarities in human capital investment induce occupational segregation, although efficiency may require identical communities. Even when some asymmetry is optimal, equilibrium segregation can cause entire “ghettos” to drop out of the labor force. Underemployment is more extensive, the easier it is for high-skill workers to isolate themselves from others. When perfect segregation is feasible, individual incentives to pursue it are self-defeating and lead instead to a collapse of the productive sector.
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U2 - 10.2307/2118403
DO - 10.2307/2118403
M3 - Article
AN - SCOPUS:0027770471
SN - 0033-5533
VL - 108
SP - 619
EP - 652
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
IS - 3
ER -