Abstract

The increasing density in major German cities is leading to tensions on the labor and rental markets. The self-selection of high skilled into cities where they earn well raises prices and promotes segregation. Increasing segregation can lead to the displacement of low-income earners who decide to leave certain neighborhoods or even cities. If displacement reaches a level where entire social classes can no longer afford places, this can have an impact on local labor markets, as these skill groups are then lacking from these cities. This project aims to evaluate whether the self-selection of skill groups and gentrification mechanisms result in labor shortages in major German cities. A quantitative spatial model, extended by a third skill group specific to the German labor market, will help to understand causes and consequences of spatial sorting as well as the impact of changing cities on local labor markets.