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Aging nations and the future of cities

  • GAIGNE, Carl
  • THISSE, Jean-Jacques

We investigate whether an aging population may challenge the supremacy of large working cities. To this end, we develop an economic geography model with two types of individuals (workers and retirees) and two sectors (local services and manufacturing). Workers produce and consume; the elderly consume only. As a result, the mobility decision of workers is driven by both the wage gap and the cost-of-living gap, unlike the elderly who react to the differences in the cost of living only. We show that the return of pre-industrial urban system dominated by rentier cities does not seem to be on the agenda. Quite the opposite, the future of large working cities is still bright, the reason being that today's urban costs act as a strong force that prevents a large share of local services and manufacturing firms from following the rentiers in the elderly cities, while the supply of differentiated b2c services impede their complete separation. Copyright (c) 2009, Wiley Periodicals, Inc.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number 2170.

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Handle: RePEc:cor:louvrp:2170
Note: In : Journal of Regional Science, 49(4), 663-688, 2009
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  1. Stuart Gabriel & Stuart S. Rosenthal, 2003. "Quality of the Business Environment Versus Quality of Life: Do Firms and Households Like the Same Cities?," Working Paper 8615, USC Lusk Center for Real Estate.
  2. Edward L. Glaeser & Janet E. Kohlhase, 2003. "Cities, Regions and the Decline of Transport Costs," NBER Working Papers 9886, National Bureau of Economic Research, Inc.
  3. Edward L. Glaeser & Matthew E. Kahn, 2003. "Sprawl and Urban Growth," Harvard Institute of Economic Research Working Papers 2004, Harvard - Institute of Economic Research.
  4. Chen, Yong & Rosenthal, Stuart S., 2008. "Local amenities and life-cycle migration: Do people move for jobs or fun?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 519-537, November.
  5. Victor Ginsburgh & Yorgo Papageorgiou & Jacques-François Thisse, 1985. "On existence and stability of spatial equilibria and steady-states," ULB Institutional Repository 2013/99282, ULB -- Universite Libre de Bruxelles.
  6. TABUCHI, Takatoshi & THISSE, Jacques-François, 2003. "Regional specialization, urban hierarchy, and commuting costs," CORE Discussion Papers 2003060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Ed Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," NBER Working Papers 7790, National Bureau of Economic Research, Inc.
  8. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  9. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
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