Nathan Jones

American cities have been growing more segregated by income. A leading explanation is that the growth in income inequality has increased high-income households' willingness to pay to cluster together. Others have blamed it on ever more restrictive housing supply regulation. I show that these explanations are complementary. To study the interaction of these two forces, I develop a quantitative urban model with a novel margin of endogenous housing supply regulation. Municipalities trade off the profits from new construction with the reduction in value of existing housing that it incurs, and I show that this generates a feedback loop between neighbourhood income and regulation. Municipalities endogenously have stronger incentives to tighten regulation for richer neighbourhoods, pricing out poor households and exacerbating spatial inequality. Quantifying my model with publicly available data, I find that the rise in the college wage premium since 1980 explains 40-86% of the increase in income segregation in New York, Los Angeles, and Chicago, and that 6-29% of this effect comes from the endogenous tightening of regulation.

Starting a career in low-skill employment has been associated with persistently worse labor market outcomes. Yet, such jobs are often concentrated in urban areas, which tend to offer substantial long-run advantages for workers. This paper examines whether the long-run effects of starting a career in low-skill employment differ across locations. We study the case of Spain’s tourism sector—a major employer of young workers that spans both urban and rural areas—to explore how geography shapes the career consequences of low-skill work. Using newly digitized data on tourist flows over forty years, we exploit variation in exposure to tourist demand across regions and graduation cohorts to measure the long-run effects of graduating in a tourist boom. Ten years after graduation, we find that workers exposed to tourist demand (i) are more likely to work in touristic sectors; (ii) have lower earnings; and (iii) are less likely to have attained higher education. Crucially, we also find that local tourism booms attract young workers through migration. Going forward, we will study whether the long-run effects of early-career employment in a low-skilled sector such as tourism differ across local labor markets.