WORK LOCATION, RESIDENCE LOCATION, AND THE INTRAURBAN WAGE GRADIENT

The monocentric city model implies that work and residence locations are likely to be positively correlated, and that wages decline with distance from the city center. The first implication has not been explicitly tested before; we provide strong support for it in Census data for Cleveland, Columbus, Dayton, Detroit, Indianapolis, Philadelphia, and Pittsburgh. Previous wage gradient estimates were hindered by lack of individual data on employment location and worker characteristics. We solve this problem by estimating probit models that predict optimal work location and using the results to explain wages. We find evidence of significant wage gradients. © 1992.