Spatial Sorting and Inequality

Abstract

The spatial segregation of college-educated and non-college-educated workers between commuting zones in the United States has steadily grown since 1980. We summarize prior work on sorting and location and document new descriptive patterns on how sorting and locations have changed over the past four decades. We find that there has been a shift in the sorting of college-educated workers from cities centered primarily around production in 1980 to cities centered around consumption by 2017. We develop a spatial equilibrium model to understand these patterns and highlight key places where further research is needed. Our framework helps understand the causes and consequences of changes in spatial sorting; their impact on inequality; and how they respond to, and feed into, the changing nature of cities. Expected final online publication date for the Annual Review of Economics, Volume 14 is August 2022. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.