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The Varieties of Regional Change

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

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 theconnection 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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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. Edward L Glaeser & Jesse M Shapiro, 2003. "Urban Growth in the 1990s: Is City Living Back?," Journal of Regional Science, Wiley Blackwell, vol. 43(1), pages 139-165.
  2. 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.
  3. Edward L. Glaeser & Albert Saiz, 2003. "The rise of the skilled city," Working Papers 04-2, Federal Reserve Bank of Philadelphia.
  4. Esteban Rossi-Hansberg & Mark L. J. Wright, 2003. "Urban structure and growth," Discussion Paper / Institute for Empirical Macroeconomics 141, Federal Reserve Bank of Minneapolis.
  5. Gabaix, Xavier & Ioannides, Yannis M., 2004. "The evolution of city size distributions," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 53, pages 2341-2378 Elsevier.
  6. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
  7. Klaus Desmet & Esteban Rossi-Hansberg, 2014. "Spatial Development," American Economic Review, American Economic Association, vol. 104(4), pages 1211-43, April.
  8. Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2477-2502, November.
  9. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
  10. Glaeser, E.L. & Scheinkman, J.A., 1993. "Economic Growth in a Cross-Section of Cities," Harvard Institute of Economic Research Working Papers 1645, Harvard - Institute of Economic Research.
  11. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  12. Steckel, Richard H., 1978. "The Economics of U.S. Slave and Southern White Fertility," The Journal of Economic History, Cambridge University Press, vol. 38(01), pages 289-291, March.
  13. 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.
  14. Edward L. Glaeser & Kristina Tobio, 2008. "The Rise of the Sunbelt," Southern Economic Journal, Southern Economic Association, vol. 74(3), pages 610-643, January.
  15. Jaimovich, Nir & Floetotto, Max, 2008. "Firm dynamics, markup variations, and the business cycle," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1238-1252, October.
  16. Simon, Curtis J. & Nardinelli, Clark, 2002. "Human capital and the rise of American cities, 1900-1990," Regional Science and Urban Economics, Elsevier, vol. 32(1), pages 59-96, January.
  17. 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.
  18. Edward L. Glaeser & Janet E. Kohlhase, 2003. "Cities, Regions and the Decline of Transport Costs," Harvard Institute of Economic Research Working Papers 2014, Harvard - Institute of Economic Research.
  19. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
  20. Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 739-767.
  21. Edward L. Glaeser & Matthew G. Resseger, 2010. "The Complementarity Between Cities And Skills," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 221-244.
  22. Jesse M. Shapiro, 2006. "Smart Cities: Quality of Life, Productivity, and the Growth Effects of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 324-335, May.
  23. Sukkoo Kim, 2006. "Division of labor and the rise of cities: evidence from US industrialization, 1850--1880," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 469-491, August.
  24. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
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