Resolving the urban wellbeing paradox: the role of education and social contact

The urban wellbeing paradox refers to the fact that, while agglomeration generates both production and consumption economies, the average subjective wellbeing of residents in the largest agglomerations of developed, mainly Western, countries is often lower than the rest of the country. Higher levels of congestion, pollution, house prices and crime are partly to blame, but the primary driver is the uneven distribution of the benefits of urban growth on a heterogeneous labour force. Spatial agglomeration increases the returns to skill (to university graduates) but these advantages depress the relative wellbeing of the less formally educated. While the proportion with tertiary education is substantially higher in large metropolitan centres, graduates still constitute a minority therein. Although the higher population density and the rich infrastructure of metropolitan centres raises the productivity of the tertiary educated minority, the wellbeing of the majority may be dampened by their residence in poorer neighbourhoods with their longer commutes and lower levels of social engagement. It is this lower wellbeing of the majority in large cities that reduces the metropolitan average and gives rise to the urban wellbeing paradox. Empirical support for the argument comes from a multivariate analysis of the 2012 European Social Survey.