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

Author

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  • 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.

Suggested Citation

  • Edward L. Glaeser & Matthew E. Kahn, 1999. "From John Lindsay to Rudy Giuliani: the decline of the local safety net?," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 117-132.
  • Handle: RePEc:fip:fednep:y:1999:i:sep:p:117-132:n:v.5no.3
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    References listed on IDEAS

    as
    1. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
    2. Alesina, Alberto & Baqir, Reza & Easterly, William, 2000. "Redistributive Public Employment," Journal of Urban Economics, Elsevier, vol. 48(2), pages 219-241, September.
    3. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-858, August.
    4. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
    5. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-637, October.
    6. Feldstein, Martin & Wrobel, Marian Vaillant, 1998. "Can state taxes redistribute income?," Journal of Public Economics, Elsevier, vol. 68(3), pages 369-396, June.
    7. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
    8. 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.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. What Happens When Liberal Cities Raise Their Minimum Wage?
      by Matthew Kahn in Environmental and Urban Economics on 2014-03-25 05:04:00

    Citations

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    Cited by:

    1. Hans-Werner Sinn, 2004. "The New Systems Competition," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(1), pages 23-38, February.
    2. 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.
    3. Andrew Haughwout & Robert Inman & Steven Craig & Thomas Luce, 2000. "Local Revenue Hills: A General Equilibrium Specification with Evidence from Four U.S. Cities," NBER Working Papers 7603, National Bureau of Economic Research, Inc.
    4. Waśniewski, Krzysztof, 2012. "Local governments’ fiscal policy as a factor of urban development – evidence from Poland," MPRA Paper 39176, University Library of Munich, Germany.
    5. Glaeser, Edward L., 2008. "The Economic Approach to Cities," Working Paper Series rwp08-003, Harvard University, John F. Kennedy School of Government.
    6. Hans-Werner Sinn, 2002. "Der neue Systemwettbewerb," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(4), pages 391-407, November.
    7. Edward L. Glaeser, 2007. "The Economics Approach to Cities," NBER Working Papers 13696, National Bureau of Economic Research, Inc.

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