ECONOMIC GROWTH IN A CROSS-SECTION OF CITIES

ECONOMIC GROWTH IN A CROSS-SECTION OF CITIES

February 1995 | Edward L. Glaeser, José A. Scheinkman, Andrei Shleifer
This paper examines the relationship between urban characteristics in 1960 and urban growth (income and population) between 1960 and 1990. The authors find that income and population growth move together and are positively related to initial schooling, negatively related to initial unemployment, and negatively related to the share of employment initially in manufacturing. These results are consistent whether examining cities or larger economic units like SMSAs. Racial composition and segregation are largely uncorrelated with urban growth, but in communities with large nonwhite populations, segregation is positively correlated with white population growth. Government expenditures (except for sanitation) are uncorrelated with urban growth, while government debt is positively correlated with later growth. The study uses data on 203 U.S. cities between 1960 and 1990, including information from 1950. Key findings include that cities with higher initial education levels grow faster, and that cities with higher initial unemployment or a larger share of manufacturing employment grow more slowly. The paper also finds that cities with higher initial income do not necessarily grow more slowly, contradicting the convergence hypothesis. The results suggest that education plays a crucial role in urban growth, as does the quality of life and productivity. The study also finds that government debt is positively correlated with later growth, indicating that debt may be a factor in urban development. Overall, the paper highlights the importance of education, initial conditions, and economic factors in determining urban growth.This paper examines the relationship between urban characteristics in 1960 and urban growth (income and population) between 1960 and 1990. The authors find that income and population growth move together and are positively related to initial schooling, negatively related to initial unemployment, and negatively related to the share of employment initially in manufacturing. These results are consistent whether examining cities or larger economic units like SMSAs. Racial composition and segregation are largely uncorrelated with urban growth, but in communities with large nonwhite populations, segregation is positively correlated with white population growth. Government expenditures (except for sanitation) are uncorrelated with urban growth, while government debt is positively correlated with later growth. The study uses data on 203 U.S. cities between 1960 and 1990, including information from 1950. Key findings include that cities with higher initial education levels grow faster, and that cities with higher initial unemployment or a larger share of manufacturing employment grow more slowly. The paper also finds that cities with higher initial income do not necessarily grow more slowly, contradicting the convergence hypothesis. The results suggest that education plays a crucial role in urban growth, as does the quality of life and productivity. The study also finds that government debt is positively correlated with later growth, indicating that debt may be a factor in urban development. Overall, the paper highlights the importance of education, initial conditions, and economic factors in determining urban growth.
Reach us at info@study.space
[slides and audio] Economic Growth in a Cross-Section of Cities