Wage inequality and urban density

While a sizable body of research has studied the relationship between aggregate productivity and geographic density, little work has considered how density influences the distribution of productivity across workers. This paper offers some descriptive evidence on the relationship between three measures of earnings inequality—unconditional percentile gaps, residual percentile gaps, between education-group gaps—and population density across a sample of US metropolitan areas between 1970 and 1990. On the whole, the findings reveal a significant and strikingly robust negative association between density and each measure.