IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Three keys to the city: resources, agglomeration economies, and sorting

  • Gerald A. Carlino

Metropolitan areas in the U.S. contain almost 80 percent of the nation’s population and nearly 85 percent of its jobs. This high degree of spatial concentration of people and jobs leads to congestion costs and higher housing costs. To offset these costs, workers must receive higher wages, and higher wages increase firms’ costs. So why do firms continue to produce in cities where the cost of doing business is so high? Economists offer three main explanations. First, cities developed and grew because of some natural advantage, such as a port. Second, as cities grew, the resulting concentration of people and jobs led to efficiency gains and cost savings for firms, creating agglomeration economies. Finally, the presence of a talented and flexible labor force made it feasible for entrepreneurs to start new businesses. This third reason for the growth of cities is called sorting. In “Three Keys to the City: Resources, Agglomeration Economies, and Sorting,” (351 KB, 13 pages) Jerry Carlino looks at recent developments in measuring each of the sources of city productivity and discusses the policy implications of this research

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.philadelphiafed.org/research-and-data/publications/business-review/2011/q3/brq311_three-keys-to-the-city.pdf
Download Restriction: no

Article provided by Federal Reserve Bank of Philadelphia in its journal Business Review.

Volume (Year): (2011)
Issue (Month): Q3 ()
Pages: 1-13

as
in new window

Handle: RePEc:fip:fedpbr:y:2011:i:q3:p:1-13
Contact details of provider: Postal: 10 Independence Mall, Philadelphia, PA 19106-1574
Web page: http://www.philadelphiafed.org/

More information through EDIRC

Order Information: Web: http://www.phil.frb.org/publicaffairs/pubs/index.html Email:


References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Carlino, Gerald A. & Saiz, Albert, 2008. "City Beautiful," IZA Discussion Papers 3778, Institute for the Study of Labor (IZA).
  2. Bleakley, Hoyt & Lin, Jeffrey, 2012. "Thick-market effects and churning in the labor market: Evidence from US cities," Journal of Urban Economics, Elsevier, vol. 72(2), pages 87-103.
  3. Jeffrey Lin, 2009. "Technological adaptation, cities and new work," Working Papers 09-17, Federal Reserve Bank of Philadelphia.
  4. Toni M. Whited & Jonas D.M. Fisher & Morris A. Davis, 2010. "Macroeconomic Implications of Agglomeration," 2010 Meeting Papers 1330, Society for Economic Dynamics.
  5. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 775-805, 05.
  6. Satyajit Chatterjee, 2003. "Agglomeration economies: the spark that ignites a city?," Business Review, Federal Reserve Bank of Philadelphia, issue Q4, pages 6-13.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fip:fedpbr:y:2011:i:q3:p:1-13. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Beth Paul)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.