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Aging Nations and the Future of Cities

  • Gaigné, Carl
  • Thisse, Jacques-François

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 prevent their complete separation.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7403.

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Date of creation: Aug 2009
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Handle: RePEc:cpr:ceprdp:7403
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  1. Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
  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. 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.
  4. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  5. 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.
  6. Edward L. Glaeser & Matthew E. Kahn, 2003. "Sprawl and Urban Growth," NBER Working Papers 9733, National Bureau of Economic Research, Inc.
  7. GINSBURGH, Victor & PAPAGEORGIOU, Yorgo & THISSE, Jacques-François, . "On existence and stability of spatial equilibria and steady-states," CORE Discussion Papers RP -651, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Takatoshi Tabuchi & Jacques-François Thisse, 2006. "Regional Specialization, Urban Hierarchy, And Commuting Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(4), pages 1295-1317, November.
  9. 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.
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