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From John Lindsay to Rudy Giuliani: the decline of the local safety net?

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Author Info

  • Edward L. Glaeser
  • Matthew E. Kahn

Abstract

This paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of session 4, "Economic inequality and local public services." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The authors contend that the future scope of city-based redistributive policies is limited. An important way in which policymakers work to reduce inequality is by redistributing income from the wealthy to the poor, channeling income tax revenue into spending on welfare and other services. The authors suggest, however, that New York City and other cities have had to scale back their redistributive policies. New York City's evolution from a manufacturing city to a service city accounts for more than one-third of the reduction in redistribution, because businesses in the service sector are more mobile and are therefore harder to tax than those in manufacturing. In addition, the authors document a more general decline in the relationship between land area and redistribution. In 1970, cities with greater land area tended to redistribute more income, but by 1990, this connection was no longer evident. The authors attribute this change to an erosion in the market power of large cities and observe that increased mobility and the existence of edge cities have contributed to a decline in the monopoly power once enjoyed by large cities.

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Bibliographic Info

Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (1999)
Issue (Month): Sep ()
Pages: 117-132

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Handle: RePEc:fip:fednep:y:1999:i:sep:p:117-132:n:v.5no.3

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Related research

Keywords: Public policy ; Public welfare ; Income distribution ; Income;

References

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  1. Glaeser, E.L. & Scheinkman, J.A., 1993. "Economic Growth in a Cross-Section of Cities," Harvard Institute of Economic Research Working Papers 1645, Harvard - Institute of Economic Research.
  2. Easterly, William & Baqir, Reza & Alesina, Alberto, 2000. "Redistributive Public Employment," Scholarly Articles 4553013, Harvard University Department of Economics.
  3. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
  4. James E. Rauch, 1991. "Productivity Gains From Geographic Concentration of human Capital: Evidence From the Cities," NBER Working Papers 3905, National Bureau of Economic Research, Inc.
  5. George J. Borjas, 1998. "Immigration and Welfare Magnets," NBER Working Papers 6813, National Bureau of Economic Research, Inc.
  6. Martin Feldstein & Marian Vaillant, 1994. "Can State Taxes Redistribute Income?," NBER Working Papers 4785, National Bureau of Economic Research, Inc.
  7. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
  8. Glaeser, E.L. & Scheinkman, J.A. & Shleifer, A., 1995. "Economic Growth in a Cross-Section of Cities," Working Papers e-95-4, Hoover Institution, Stanford University.
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Citations

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Cited by:
  1. Glaeser, Edward L., 2008. "The Economic Approach to Cities," Working Paper Series rwp08-003, Harvard University, John F. Kennedy School of Government.
  2. Hans-Werner Sinn, 2002. "The New Systems Competition," NBER Working Papers 8747, National Bureau of Economic Research, Inc.
  3. Andrew Haughwout & Robert Inman & Steven Craig & Thomas Luce, 2004. "Local Revenue Hills: Evidence from Four U.S. Cities," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 570-585, May.
  4. Edward L. Glaeser, 2007. "The Economics Approach to Cities," NBER Working Papers 13696, National Bureau of Economic Research, Inc.

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