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Aggregate employment growth and the deconcentration of metropolitan employment

Author

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  • Satyajit Chatterjee
  • Gerald A. Carlino

Abstract

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.

Suggested Citation

  • Satyajit Chatterjee & Gerald A. Carlino, 1998. "Aggregate employment growth and the deconcentration of metropolitan employment," Working Papers 98-6, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:98-6
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    File URL: http://www.philadelphiafed.org/research-and-data/publications/working-papers/1998/wp98-6.pdf
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    References listed on IDEAS

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    1. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    2. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
    3. Eaton, Jonathan & Eckstein, Zvi, 1997. "Cities and growth: Theory and evidence from France and Japan," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 443-474, August.
    4. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    5. Gaspar, Jess & Glaeser, Edward L., 1998. "Information Technology and the Future of Cities," Journal of Urban Economics, Elsevier, vol. 43(1), pages 136-156, January.
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    7. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
    8. Henderson, J. Vernon, 1987. "General equilibrium modeling of systems of cities," Handbook of Regional and Urban Economics,in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 23, pages 927-956 Elsevier.
    9. Ronald L. Moomaw, 1981. "Productivity and City Size: A Critique of the Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 96(4), pages 675-688.
    10. Leo Sveikauskas, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, Oxford University Press, vol. 89(3), pages 393-413.
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    Citations

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    Cited by:

    1. Cuberes David, 2009. "A Model of Sequential City Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-41, May.
    2. Satyajit Chatterjee, 2004. "On the Contribution of Agglomeration Economies to the Spatial Concentration of U.S. Employment," 2004 Meeting Papers 192, Society for Economic Dynamics.
    3. Marvin Goodfriend, 2000. "The role of a regional bank in a system of central banks," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 7-25.
    4. Gerald A. Carlino, 1998. "Trends in metropolitan employment growth," Business Review, Federal Reserve Bank of Philadelphia, issue Jul, pages 13-22.
    5. Sukkoo Kim, 2002. "The Reconstruction of the American Urban Landscape in the Twentieth Century," NBER Working Papers 8857, National Bureau of Economic Research, Inc.
    6. Beeson, Patricia E. & DeJong, David N. & Troesken, Werner, 2001. "Population growth in U.S. counties, 1840-1990," Regional Science and Urban Economics, Elsevier, vol. 31(6), pages 669-699, November.
    7. Gerald A. Carlino & Satyajit Chatterjee, 1999. "Postwar trends in metropolitan employment growth: decentralization and deconcentration," Working Papers 99-10, Federal Reserve Bank of Philadelphia.
    8. Marvin Goodfriend, 1999. "The role of a regional bank in a system of central banks. 1999 annual report of the Federal Reserve Bank of Richmond," Annual Report, Federal Reserve Bank of Richmond.
    9. M. Bellinzas, 2004. "Dinamiche demografiche, agglomerazione e determinanti economiche. Il caso italiano," Working Paper CRENoS 200407, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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    Keywords

    Employment (Economic theory) ; Metropolitan areas - Statistics;

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