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Aggregate employment growth and the deconcentration of metropolitan employment

  • Satyajit Chatterjee
  • Gerald Carlino

In this paper, the authors document that the disparity in employment densities across U.S. metropolitan areas has lessened substantially over the postwar period. To account for this deconcentration of metropolitan employment, the authors develop a system-of-cities model in which an increase in aggregate metropolitan employment causes congestion costs to increase faster for the more dense metro areas. A calibrated version of the model reveals that the (roughly) two-and-a-half-fold increase in postwar aggregate metropolitan employment implies, by itself, more deconcentration than actually observed. Thus, rising aggregate metropolitan employment appears to be a powerful force favoring deconcentration, although some benefit of greater employment density appears to have partially offset the effects of rising congestion costs for the more dense metro areas.

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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 98-6.

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Date of creation: 1998
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Handle: RePEc:fip:fedpwp:98-6
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  1. Duncan Black & Vernon Henderson, 1997. "Urban Growth," NBER Working Papers 6008, National Bureau of Economic Research, Inc.
  2. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
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  9. Moomaw, Ronald L, 1981. "Productivity and City Size? A Critique of the Evidence [Are There Returns to Scale in City Size?]. [Bias in the Cross Section Estimates of the Elasticity of Substitution]," The Quarterly Journal of Economics, MIT Press, vol. 96(4), pages 675-88, November.
  10. Sveikauskas, Leo A, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, MIT Press, vol. 89(3), pages 393-413, August.
  11. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  12. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
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