Over the past three decades, the earnings of workers with a college education have substantially increased relative to those with less education. In 1980, the average college graduate earned 38% more than the average high school
graduate. By 2000, the college-high school graduate wage gap increased to 57%, and by 2011 it rose to 73%.
At the same time, workers have become increasingly spatially segregated by education. Cities that initially had a large share of college graduates in 1980 increasingly attracted larger shares of college educated workers from 1980 to
2000, while cities with relatively less educated populations in 1980 gained few college grads over the following 20 years. The increasingly “highly educated cities” also experienced higher wage growth for both low- and high-skill workers and substantially larger increases in housing costs. The economic trajectories of these increasing 1 Estimates refer to workers employed at least 35 hours per week and 50 weeks per year within the ages of 25 and 55. Controls include race, Hispanic origin, sex, and experience. Data are from 1980 and 2000 US Censuses, and the 2011 American Community Survey.high skill cities are diverging from those with fewer college graduates (Moretti, 2013).