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The Varieties of Regional Change

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  • Edward L. Glaeser
  • Giacomo Ponzetto
  • Kristina Tobio

Abstract

Many metropolitan areas have experienced extreme boom-bust cycles over the past century. Some places, like Detroit, grew enormously as industrial powerhouses and then declined, while other older cities, like Boston, seem quite resilient. Education does a reasonable job of explaining urban resilience. In this paper, we present a simple model where education increases the level of entrepreneurship. In this model, human capital spillovers occur at the city level because skilled workers produce more product varieties and thereby increase labor demand. We decompose empirically the causes of the connection between skills and urban success and find that skills are associated with growth in productivity or entrepreneurship, not with growth in quality of life, at least outside of the West. We also find that skills seem to have depressed housing supply growth in the West, but not in other regions, which supports the view that educated residents in that region have fought for tougher land-use controls. We also present evidence that skills have had a disproportionately large impact on unemployment during the current recession.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 472.

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Date of creation: Jun 2010
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Handle: RePEc:bge:wpaper:472

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  1. Klaus Desmet & Esteban Rossi-Hansberg, 2007. "Spatial Growth and Industry Age," NBER Working Papers 13302, National Bureau of Economic Research, Inc.
  2. Xavier Gabaix & Yannis M. Ioannides, 2003. "The Evolution of City Size Distributions," Discussion Papers Series, Department of Economics, Tufts University, Department of Economics, Tufts University 0310, Department of Economics, Tufts University.
  3. Esteban Rossi-Hansberg & Mark L. J. Wright, 2006. "Urban structure and growth," Staff Report, Federal Reserve Bank of Minneapolis 381, Federal Reserve Bank of Minneapolis.
  4. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(6), pages 1126-52, December.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
  5. Klaus Desmet & Esteban Rossi-Hansberg, 2014. "Spatial Development," American Economic Review, American Economic Association, American Economic Association, vol. 104(4), pages 1211-43, April.
  6. Edward Glaeser & Janet Kohlhase, 2003. "Cities, regions and the decline of transport costs," Papers in Regional Science, Springer, Springer, vol. 83(1), pages 197-228, October.
  7. Edward L. Glaeser & Albert Saiz, 2003. "The Rise of the Skilled City," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2025, Harvard - Institute of Economic Research.
  8. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
  9. Edward L. Glaeser & Jose A. Scheinkman & Andrei Shleifer, 1995. "Economic Growth in a Cross-Section of Cities," NBER Working Papers 5013, National Bureau of Economic Research, Inc.
  10. Nir Jaimovich, 2004. "Firm Dynamics, Markup Variations, and the Business Cycle," Discussion Papers, Stanford Institute for Economic Policy Research 07-013, Stanford Institute for Economic Policy Research, revised Mar 2007.
  11. 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.
  12. Simon, Curtis J. & Nardinelli, Clark, 2002. "Human capital and the rise of American cities, 1900-1990," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 32(1), pages 59-96, January.
  13. Sukkoo Kim, 2006. "Division of Labor and the Rise of Cities: Evidence from U.S. Industrialization, 1850-1880," NBER Working Papers 12246, National Bureau of Economic Research, Inc.
  14. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(2), pages 223-51, April.
  15. repec:fth:stanho:e-95-4 is not listed on IDEAS
  16. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(2), pages 252-284, April.
  17. Edward L. Glaeser & Matthew G. Resseger, 2010. "The Complementarity Between Cities And Skills," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 50(1), pages 221-244.
  18. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  19. Sukkoo Kim, 2006. "Division of labor and the rise of cities: evidence from US industrialization, 1850--1880," Journal of Economic Geography, Oxford University Press, Oxford University Press, vol. 6(4), pages 469-491, August.
  20. Jesse M. Shapiro, 2005. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," NBER Working Papers 11615, National Bureau of Economic Research, Inc.
  21. Steckel, Richard H., 1978. "The Economics of U.S. Slave and Southern White Fertility," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 38(01), pages 289-291, March.
  22. Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(3), pages 739-767, August.
  23. Edward L. Glaeser & Kristina Tobio, 2008. "The Rise of the Sunbelt," Southern Economic Journal, Southern Economic Association, Southern Economic Association, vol. 74(3), pages 610-643, January.
  24. Edward L Glaeser & Jesse M Shapiro, 2003. "Urban Growth in the 1990s: Is City Living Back?," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 43(1), pages 139-165.
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