

The signals workers send by living in a city - robg
http://www.ryanavent.com/blog/?p=2276

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pmichaud
tl;dr Summary: High cost workers should force employers to seek less expensive
cities. The explanation for this not happening is that workers signal their
quality by being in high cost areas since living there implies they are high
enough quality to get a job that can allow them to afford living there.

Since high quality workers congregate there, employers stay despite the cost,
to gain the benefit of a high quality workforce.

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notauser
My preferred argument is that high labor costs increases supply which
_reduces_ the total cost of labor.

For example, in a city I need one DBA which costs me $100k. In the country I
need _two_ DBAs at $60k each, because if one leaves I'm not confident I can
get another of sufficient skill before the business falls apart.

This applies less to larger businesses, which have internal economies of scale
and so don't need to rely on the outside market as much. It also doesn't apply
to those reliant on lower skilled labor which has a higher supply by default.

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j_baker
"skill-biased technological change causes a core-periphery bifurcation where
the agglomeration of high-skill workers eventually constitutes a unique stable
equilibrium."

Is this even in English?

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brettnak
It's more math than English, but yes.

<http://en.wikipedia.org/wiki/Bifurcation_theory>

In case you've never studied bifurcation theory.

