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Falling Behind: California's Interior Metropolitan Areas

  • Author(s): Manville, Michael
  • Drennan, Matthew
  • et al.
Abstract

From 1969 to 2004 average wages on California's coast grew much faster than those in its interior. In this article, we document this wage gap and link it to education and industrial change. We show that the share of earnings from traditional goods production activities fell on both the coast and in the interior from 1969 to 2000, but that the share of earnings from information-based activities-and the share of educated people who are the crucial inputs to those activities­ rose much more on the coast over the same period. We also show that the wage returns to skill were higher on the coast during this time, which could reflect agglomeration effects or simply the attraction of more productive people to the coast. Immigration had no impact on the metropolitan wage.

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