Bright Minds, Big Rent:
Gentrification and the Rising Returns
to Skill
Presentation prepared for Philadelphia Fed
Research Symposium May 25, 2016
Lena Edlund, Cecilia Machado, Maria Sviatschi
"Any opinions and conclusions expressed herein are those of the author(s) and do
not necessarily represent the views of the U.S. Census Bureau. All results have been
reviewed to ensure that no confidential information is disclosed."
2-3Bdrm Home, ‘000 1980$
2-3Bdrm Home, ‘000 1980$
2-3Bdrm Home, ‘000 1980$
2-3Bdrm Home, ‘000 1980$
2-3Bdrm Home, ‘000 1980$
2-3Bdrm Home, ‘000 1980$
Hypothesis
Hypothesis
• Adults in high income
households work more
– More dual earner
households
– More singles
– Longer work week
 Cut down on commute
Head, Spouse both full time 1980
Source: authors calculations, IPUMS
Head, Spouse both full time 2012
Source: authors calculations, IPUMS
Households w/ at least
1 head/spouse NOT working full time
Source: authors calculations, IPUMS
40h+
Adults 25-55
EMS 2015, NBER WP 21729
Model
Model
Model
Distance to CBD
Model
Distance to CBD
Model
Distance to CBD
Model
Price, rent:
Distance to CBD
Model
Price, rent:
Distance to CBD
Model
Small house
Short commute
Large house
Long commute
Little time at home
~
Long hours
Time at home
~
Short hours
Price, rent:
Distance to CBD
Model
Small house
Short commute
Large house
Long commute
Little time at home
~
Long hours
Time at home
~
Short hours
Price, rent:
Distance to CBD
Model
Small house
Short commute
Large house
Long commute
Little time at home
~
Long hours
Time at home
~
Short hours
Price, rent:
Distance to CBD
Model
Small house
Short commute
Large house
Long commute
Little time at home
~
Long hours
Time at home
~
Short hours
Price, rent:
Distance to CBD
Model
Small house
Short commute
Large house
Long commute
Little time at home
~
Long hours
Time at home
~
Short hours
Price, rent:
Distance to CBD
FT – Women
Distance to CBD
EMS 2015, NBER WP 21729
FT – No College
Distance to CBD
EMS 2015, NBER WP 21729
Jobs in CBD
Suburbanization of Unskilled Jobs
Correction,
y scale wrong
EMS 2015, NBER WP 21729
Empirical Strategy
Empirical Strategy
Empirical Strategy
Empirical Strategy
Reduced Form
House $ on Bartik
Reduced Form
House $ on Bartik
1st Stage
OLS
IV
IV
IV
IV
IV
IV
Sub-samples
• Crime
– Cities in which decline
high/low
– Time period
• 1980,1990 – Crime rose
• 2000,2012 – Crime declined
• Not NYC
• Real Estate Supply Inelastic
– Cities that shrunk/grew
Tract-panel
• Tract fixed effects
• Tracts with high/low black
population
Summary
Observation
Summary
Observation
Proposed Explanation
Summary
Observation
Proposed Explanation
The End