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Full-Text Articles in Social and Behavioral Sciences
Amenities And The Labor Earnings Function, Philip E. Graves, Robert L. Sexton
Amenities And The Labor Earnings Function, Philip E. Graves, Robert L. Sexton
PHILIP E GRAVES
Desirable locations are, other things equal, expected to be characterized by a mix of higher rents or lower wages. That is, if one area is more attractive than others, inmigration would occur, driving up the demand for land (hence raising rents) and increasing the supply of labor (hence lowering wages). The in-movement will continue until utility is the same across locations in equilibrium. Failing to hold constant amenities in the traditional earnings functions employed by labor economists will result, then, in omitted-variable bias if worker characteristics (years of schooling, union membership, and so on) are correlated with amenities. By way …
Amenities And Fringe Benefits: Omitted Variable Bias, Philip E. Graves, Robert L. Sexton, Michelle M. Arthur
Amenities And Fringe Benefits: Omitted Variable Bias, Philip E. Graves, Robert L. Sexton, Michelle M. Arthur
PHILIP E GRAVES
If labor is fairly mobile, as it is in the United States, one would expect that households would move from less desirable areas toward more desirable areas until all areas are equally desirable. The way that areas become equally desirable is through the impact of movers on wages and rents (and possibly "endogenous" disamenities, such as congestion or pollution). That is, as people move to desirable areas, they will increase the demand for land (raising rents) and increase the supply of labor (lowering wages); in equilibrium, the wage and rent "compensation" for the niceness of an area reveals, in dollar …