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The Effects of Metropolitan Job Growth on the Size Distribution of Family Income

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Abstract

This paper examines how a metropolitan area's job growth affects its income distribution. The research uses annual Current Population Survey data on the income distribution in different metropolitan areas from 1979 through 1988. Faster metropolitan job growth increases real family income in the lowest income quintile by a significantly greater percentage than for the average family. Metropolitan job growth also increases the value of property owned by upper income quintiles, but property value effects are not large enough to offset the progressive effects of growth on labor income. Simulations indicate that economic development programs to increase metropolitan job growth will have a progressive effect if the cost per job created is low, and these costs are financed by personal taxes. But economic development programs with a high cost per job created, or financed by cutting social welfare programs, will have a net negative effect on the lowest income quintile.

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  • Timothy J. Bartik, 1991. "The Effects of Metropolitan Job Growth on the Size Distribution of Family Income," Upjohn Working Papers 91-06, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:91-06
    Note: A revised version of this paper appears in Journal of Regional Science, Vol. 34, No. 4 (November 1994), pp. 483-502.
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    1. Rod Cross, 2000. "Hysteresis and Emu," Metroeconomica, Wiley Blackwell, vol. 51(4), pages 367-379, November.
    2. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
    3. Blinder, Alan S & Esaki, Howard Y, 1978. "Macroeconomic Activity and Income Distribution in the Postwar United States," The Review of Economics and Statistics, MIT Press, vol. 60(4), pages 604-609, November.
    4. Timothy J. Bartik, 2003. "Local Economic Development Policies," Upjohn Working Papers 03-91, W.E. Upjohn Institute for Employment Research.
    5. Rebecca M. Blank & Alan S. Blinder, 1985. "Macroeconomics, Income Distribution, and Poverty," NBER Working Papers 1567, National Bureau of Economic Research, Inc.
    6. Blank, Rebecca M, 1989. "Disaggregating the Effect of the Business Cycle on the Distribution of Income," Economica, London School of Economics and Political Science, vol. 56(222), pages 141-163, May.
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    More about this item

    Keywords

    earnings; wages; job; growth; family; income; Bartik; economic; development; urban;
    All these keywords.

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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