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Cities, Skills, and Regional Change

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  • Edward L. Glaeser
  • Giacomo A.M. Ponzetto
  • Kristina Tobio

Abstract

One approach to urban areas emphasizes the existence of certain immutable relationships, such as Zipf’s or Gibrat’s Law. An alternative view is that urban change reflects individual responses to changing tastes or technologies. This paper examines almost 200 years of regional change in the U.S. and finds that few, if any, growth relationships remain constant, including Gibrat’s Law. Education does a reasonable job of explaining urban resilience in recent decades, but does not seem to predict county growth a century ago. After reviewing this evidence, we present and estimate a simple model of regional change, where education increases the level of entrepreneurship. Human capital spillovers occur at the city level because skilled workers produce more product varieties and thereby increase labor demand. We 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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16934.

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Date of creation: Apr 2011
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Publication status: published as Edward L. Glaeser & Giacomo A. M. Ponzetto & Kristina Tobio, 2014. "Cities, Skills and Regional Change," Regional Studies, Taylor & Francis Journals, vol. 48(1), pages 7-43, January.
Handle: RePEc:nbr:nberwo:16934

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  1. Klaus Desmet & Esteban Rossi-Hansberg, 2010. "Spatial Development," Working Papers, Fondazione Eni Enrico Mattei 2010.26, Fondazione Eni Enrico Mattei.
  2. Edward L. Glaeser & Joseph Gyourko, 2001. "Urban Decline and Durable Housing," NBER Working Papers 8598, National Bureau of Economic Research, Inc.
  3. Esteban Rossi-Hansberg & Mark L. J. Wright, 2003. "Urban structure and growth," Discussion Paper / Institute for Empirical Macroeconomics, Federal Reserve Bank of Minneapolis 141, Federal Reserve Bank of Minneapolis.
  4. Eaton, Jonathan & Eckstein, Zvi, 1997. "Cities and growth: Theory and evidence from France and Japan," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 27(4-5), pages 443-474, August.
  5. 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.
  6. Edward L. Glaeser & Joseph Gyourko & Raven E. Saks, 2005. "Urban Growth and Housing Supply," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 2062, Harvard - Institute of Economic Research.
  7. Edward L. Glaeser & William R. Kerr & Giacomo A. M. Ponzetto, 2009. "Clusters of Entrepreneurship," Harvard Business School Working Papers, Harvard Business School 10-019, Harvard Business School.
  8. Gabaix, Xavier & Ioannides, Yannis M., 2004. "The evolution of city size distributions," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 53, pages 2341-2378 Elsevier.
  9. Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, Elsevier, vol. 144(6), pages 2477-2502, November.
  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. 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.
  12. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 106(4), pages 667-705, August.
  13. Ed Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," NBER Working Papers 7790, National Bureau of Economic Research, Inc.
  14. 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.
  15. Duranton, Gilles, 2006. "Some foundations for Zipf's law: Product proliferation and local spillovers," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 36(4), pages 542-563, July.
  16. Edward L. Glaeser & Albert Saiz, 2003. "The rise of the skilled city," Working Papers 04-2, Federal Reserve Bank of Philadelphia.
  17. Kim, Sukkoo & Margo, Robert A., 2004. "Historical perspectives on U.S. economic geography," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 66, pages 2981-3019 Elsevier.
  18. 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.
  19. 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.
  20. Jan Eeckhout, 2004. "Gibrat's Law for (All) Cities," American Economic Review, American Economic Association, American Economic Association, vol. 94(5), pages 1429-1451, December.
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Cited by:
  1. Alexander Klein & Tim Leunig, 2013. "Gibrat's Law and the British industrial revolution," Economic History Working Papers, London School of Economics and Political Science, Department of Economic History 58363, London School of Economics and Political Science, Department of Economic History.
  2. Trax, Michaela & Brunow, Stephan & Suedekum, Jens, 2012. "Cultural Diversity and Plant‐Level Productivity," IZA Discussion Papers 6845, Institute for the Study of Labor (IZA).
  3. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, Elsevier, in: Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853 Elsevier.
  4. Giorgio Fazio & Marco Modica, 2012. "Pareto or log-normal? A recursive-truncation approach to the distribution of (all) cities," Working Papers, Business School - Economics, University of Glasgow 2012_10, Business School - Economics, University of Glasgow.
  5. Bernard Fingleton & Harry Garretsen & Ron Martin, 2012. "Recessionary Shocks And Regional Employment: Evidence On The Resilience Of U.K. Regions," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 52(1), pages 109-133, 02.
  6. repec:wyi:journl:002175 is not listed on IDEAS
  7. Dario Diodato & Anet Weterings, 2012. "The Resilience of Dutch Regions to Economic Shocks. Measuring the relevance of interactions among firms and workers," Papers in Evolutionary Economic Geography (PEEG), Utrecht University, Section of Economic Geography 1215, Utrecht University, Section of Economic Geography, revised Aug 2012.
  8. Jaume Masip Tresserra, 2013. "Sub-centres and Urban Inequality: A study on Social Equity in the Barcelona Metropolitan Region," ERSA conference papers ersa13p64, European Regional Science Association.

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