Business Commons^™

Exploring Wage Determination By Education Level: A U.S. Msa Analysis For 2005-2012, Penelope B. Prime, Donald Grimes, Mary Beth Walker

International Business Faculty Publications

The purpose of this study is to explain urban wage differentials with a special focus on educational levels. The authors explore whether the share of people with a bachelor’s degree or higher in the community matters to the wages of those within specific educational cohorts, accounting for cost of living, human capital externalities, consumer externalities, policy factors, and local labor market conditions. Using data for all U.S. Metropolitan Statistical Areas between 2005 and 2012, the authors find that the presence of more highly educated people will result in a higher median wage in the community overall, as do many studies, …