Recent Spatial Growth Dynamics in Wages and Housing Costs: Proximity to Urban Production Externalities and Consumer Amenities

Despite advances in communications and transportation technology remoteness within the United States has been increasingly associat ed with relatively lower economic growth. Using a hedonic pricing approach, this paper assesses the relative importance of proximity to urban consumer amenities and production spillovers in explaining growth differentials in wages and housing costs across the U.S. urban hierarchy. We generally find that productivity disadvantages increased with remoteness from urban agglomeration over time. At the same time, we find remoteness from larger metropolitan areas as increasingly attractive to households. In decomposing these influences on wage growth differentials, we find that the dominant force for lower wage growth in remote nonmetropolitan an d small metropolitan-area counties is increasing relative productivity di sadvantages. Yet, for medium-to-large metropolitan areas, increased attractiveness to households of remoteness from even larger metropolitan areas generally contributed the most to relatively weaker wage growth.