history path dependence and development evidence from colonial railroads settlers and cities in kenya little is known about the extent and forces of path dependence in developing countries colonial era railroad construction in kenya provides a natural experiment to study the emergence and persistence of spatial equilibrium data spanning over one century shows that railroads determined the location of european settlers asian traders and the main cities at independence europeans then left asians departed and railroads declined in the immediate post independence period constituting local shocks to physical and human capital yet the colonial cities persisted we test four explanations for path dependence based on institutional persistence technological change sunk investments and spatial coordination failures

amenity values versus land constraints the spatial effects of natural landscape features on housing values when local amenities are tied to natural land use features that cannot be developed for physical or regulatory reasons the corresponding implicit price estimates from a hedonic housing model may reflect local supply constraints and confound estimation of natural amenity values using a spatial simultaneous equations model of housing values and migration we examine whether local supply constraints from natural or preserved features have influenced the housing market results indicate that constraints associated with the presence of water bodies and some types of open space preservation have contributed to higher housing prices offsetting local demand for these natural amenities jel c31 r23

are politics and geography related evidence from a cross section of capital cities with a few prominent exceptions a capital city is typically alsothe biggest city of its country this might suggest that a capitalcity is more attractive than other cities because of thecapital city function in the paper we test this hypothesis bylooking at employment growth in a sample of capital cities employment growth might indicate outmigration from the politicalhinterland and immigration into the capital city specifically welook at a sample of regional capitals that consists of west germancounty seats these county seats underwent reform in the latesixties and early seventies in this sample we can rejectthe idea that the county capital role does not have apositive influence on local employment growth

intercity trade and the industrial diversification of cities abstract the industrial diversification of cities is explained without imposing linkages among industries in each of two city industries a manufacture is produced competitively as the final good using labor and industry specific differentiated services manufacturers import the services of their industry from all cities that produce them since their technology favors variety in specialized cities the city industry is large and many services are locally available but the two manufactures have to be traded among cities in diversified cities the two manufactures are produced in the same city and each industry crowds out half the local services of the other but manufactures need not be imported a lower cost of trading manufactures e g railroads and intercity highways favors a system of specialized cities while a lower cost of trading services e g telephone the internet favors a system of diversified cities since the latter cities rely more on imported services having fewer locally a larger cost share of services favors specialization and high intra city commuting cost and population growth favor diversification

economic growth in a cross section of cities abstract we examine the relationship between urban characteristics in 1960 and urban growth between 1960 and 1990 income and population growth move together and both types of growth are 1 positively related to initial schooling 2 negatively related to initial unemployment and 3 negatively related to the initial share of employment in manufacturing racial composition and segregation are uncorrelated with urban growth across all cities but in cities with large nonwhite communities segregation is positively correlated with population growth government expenditures except for sanitation are uncorrelated with growth government debt is positively correlated with later growth

urban hierarchies and city growth in the balkans this paper uses empirical evidence from the balkan peninsula during the 1981 2001 period in order to study the dynamic patterns of a conflict affected city size distribution by examining the time variations of the pareto exponent on the one hand and by exploring cities relative growth patterns and intradistribution mobility on the other the paper shows that city growth dynamics follow a hybrid pattern where city size filters the effects of external shocks city size dynamics thus seem more complex than that predicted by random growth or endogenous growth theories in the balkan peninsula during the 1981 2001 period medium sized city demographics have resisted external shocks due to conflicts redrawing of national frontiers and institutional upheaval better than large conglomerations however this does not lead to convergence towards a steady city size

a theory of racial diversity segregation and productivity abstract empirical evidence illustrates that diversity generates both economic costs and benefits this paper develops a theoretical model that accounts for the positive and deleterious effects of heterogeneity first an expanded solow growth model demonstrates that the direct effects of diversity can be positive or negative and depend upon the size of fixed parameter values second diversity also influences individuals location decisions segregation variation of diversity across regions always reduces national output per worker so if diversity induces integration it indirectly augments productivity as well finally political policies aimed at reducing interaction costs across groups may actually reduce aggregate output per worker by encouraging segregation

causes of sprawl a portrait from space we study the extent to which u s urban development is sprawling and what determines differences in sprawl across space using remote sensing data to track the evolution of land use on a grid of 8 7 billion 30 30 meter cells we measure sprawl as the amount of undeveloped land surrounding an average urban dwelling the extent of sprawl remained roughly unchanged between 1976 and 1992 although it varied dramatically across metropolitan areas ground water availability temperate climate rugged terrain decentralized employment early public transport infrastructure uncertainty about metropolitan growth and unincorporated land in the urban fringe all increase sprawl

urban decline and durable housing urban decline is not the mirror image of growth and durable housing is the primary reason the nature of decline is so different this paper presents a model of urban decline with durable housing and verifies these implications of the model 1 city growth rates are skewed so that cities grow more quickly than they decline 2 urban decline is highly persistent 3 positive shocks increase population more than they increase housing prices 4 negative shocks decrease housing prices more than they decrease population 5 if housing prices are below construction costs then the city declines and 6 the combination of cheap housing and weak labor demand attracts individuals with low levels of human capital to declining cities

industrial reallocation across us cities 1977 1997 abstract between 1977 and 1997 us employment shifted dramatically in favor of industries that used skilled labor intensively during this same period some cities withered while others prospered this paper examines employment growth in 39 industries across 316 cities to evaluate the importance of learning by doing industry specific location fundamentals human capital externalities and hiring cost explanations in these geographic shifts growth in industries that used skill intensively was particularly sensitive to the presence of local human capital that growth was almost always negatively related to the initial size of the industry within the city implies a limited role for learning by doing and industry specific location fundamentals stories

human capital externalities effects for low educated workers and low skilled jobs broersma l edzes a j e and van dijk j human capital externalities effects for low educated workers and low skilled jobs regional studies investments in human capital are essential themes in many policy programmes besides the direct private returns of education there is evidence of positive human capital externalities at the level of regions and firms the results in this paper show that both production and consumption externalities have positive effects on wages production externalities are transmitted at the level of firms and not at the regional level for workers in low skilled jobs consumption externalities dominate production externalities workers on low skilled jobs earn higher wages when working in cooperation with workers in high skilled jobs while for low educated workers such cooperation with high educated workers is negative

gibrat s law for all cities two empirical regularities concerning the size distribution of cities have repeatedly been established zipf s law holds the upper tail is pareto and city growth is proportionate census 2000 data are used covering the entire size distribution not just the upper tail the nontruncated distribution is shown to be lognormal rather than pareto this provides a simple justification for the coexistence of proportionate growth and the resulting lognormal distribution an equilibrium theory of local externalities that can explain the empirical size distribution of cities is proposed the driving force is a random productivity process of local economies and the perfect mobility of workers

does the local government structure affect population and income growth an empirical analysis of the 1952 municipal reform in sweden hanes n and wikstrom m does the local government structure affect population and income growth an empirical analysis of the 1952 municipal reform in sweden regional studies the main purpose of the paper is to analyse if the swedish municipal reform in 1952 affected subsequent income growth and population movements the empirical analysis is conducted using data for the period 1953 to 1959 the main result is that the municipal amalgamations had no effect on the municipal income growth patterns however a positive effect on population growth is found for the municipalities that were small in size prior to the reform it is also found that the composition of the municipalities formed affected subsequent growth hanes n et wikstrom m la structure de l administration locale influence t elle la croissance de la population et des revenus une analyse empirique de la reforme municipale suedoise de 1952 regional studies cet article cherche principalement a analyser si oui ou non la reforme municipale

knowledge in cities this study identifies clusters of us and canadian metropolitan areas with similar knowledge traits these groups ranging from making regions characterised by knowledge about manufacturing to thinking regions noted for knowledge about the arts humanities it and commerce can be used by analysts and policy makers for the purposes of regional benchmarking or comparing the types of programme and infrastructure available to support closely related economic activities in addition these knowledge based clusters help to explain the types of region that have levels of economic development that exceed or fall short of other places with similar amounts of college attainment regression results show that engineering building enterprising and making regions are associated with higher levels of productivity and or income per capita while teaching understanding working and comforting regions have lower levels of economic development

regional sorting of human capital the choice of location among young adults in sweden berck p tano s and westerlund o regional sorting of human capital the choice of location among young adults in sweden regional studies migration rates are highest among young adults especially students and their location choices affect the regional distribution of human capital growth and local public sector budgets using swedish register data on young adults the choice of whether to enrol in education and the choice of location are estimated jointly the results indicate a systematic selection into investment in further education based on school grades and associated preferences for locations with higher per capita tax bases for students the estimates indicate lower preferences for locations with higher shares of older people the importance of family networks for the choice of location is confirmed

cities and cultures we investigate whether cultural diversity across us cities measured as the variety of native languages spoken by city residents is associated with any effect on their productivity diversity of cultures may imply diversity of production skills of abilities and of occupations that enhances the productive performance of a city on the other hand transaction costs and frictions across groups may hurt productivity similarly diversity in available goods and services can increase utility but distaste for or hostility to different cultural groups may decrease it using census data from 1970 to 1990 we find that wages and employment density of us born workers were systematically higher ceteris paribus in cities with richer linguistic diversity these positive correlations reveal a net positive effect of diversity on productivity that survives robustness checks and instrumental variable estimation this effect is found to be stronger for highly educated workers and for white workers we also show that better assimilated non native speakers i e those who speak english well and have been in the us for more than five years are most beneficial to the productivity of us born workers

princes and merchants european city growth before the industrial revolution as measured by the pace of city growth in western europe from 1000 to 1800 absolutist monarchs stunted the growth of commerce and industry a region ruled by an absolutist prince saw its total urban population shrink by one hundred thousand people per century relative to a region without absolutist government this might be explained by higher rates of taxation under revenue maximizing absolutist governments than under nonabsolutist governments which care more about general economic prosperity and less about state revenue

re evaluating the impact of immigration on the u s rental housing market abstract previous studies provide evidence that immigration increases housing prices and rents to deal with endogenous location choices of immigrants these studies often use a shift share instrumental variable approach this approach however fails to adequately account for the natural attraction of immigrants to cities with thriving economies high immigration cities provide more economic opportunities and thus exhibit persistently rising housing prices and rents this paper improves upon the traditional empirical approach by explicitly controlling for initial city characteristics that lead to both increases in immigration and the evolution of rents results suggest that after controlling for endogenous sorting of immigrants the positive effect of immigration on rents is attenuated while the impact of immigrant inflows is smaller an extension of the main results suggests the effects of immigration on rents remains larger than that of native inflows

the interactive effects of human capital and quality of life on economic growth abstractto bridge the gap in the quality of life qol and economic growth literature and understand the reinforcing effects of qol and human capital on economic development we examine the interactive effects of these two factors on wage growth from 2000 to 2007 at the county level across the united states first a rosen roback model is employed to estimate implicit values of amenities including climate clean air and other natural attributes which are used to generate qol indices second qol human capital represented by the share of college graduates and their interaction serve as key variables in the wage growth model an instrumental variable approach and location fixed effects are used to address endogeneity of human capital and control for location specific unobservable characteristics results suggest that human capital and qol significantly contribute to economic growth and the growth effects are even larger in nonmetropolitan counties importantly we find that the effect of human capital on

urban growth and transportation we estimate the effects of interstate highways on the growth of u s cities between 1983 and 2003 we find that a 10 increase in a city s initial stock of highways causes about a 1 5 increase in its employment over this 20 year period to estimate a structural model of urban growth and transportation we rely on an instrumental variables estimation that uses a 1947 plan of the interstate highway system an 1898 map of railroads and maps of the early explorations of the u s as instruments for 1983 highways we investigate the role of interstate highways in the growth of u s cities our investigation is in three parts in the first we develop a simple structural model describing the joint evolution of highways and employment in cities in the second we develop an instrumental variables strategy that allows us to identify key parameters of our structural model we are also able to provide out of sample evidence for the validity of our estimates and for the central assumptions of our model in the third we use our estimates to assess counterfactual transportation policies we find that a 10 increase in a city s stock of interstate highways causes about a 1 5 increase in its employment over 20 years and that an additional kilometre of highway allocated to a city at random is associated with a larger increase in employment or population than is a road assigned to a city by the prevailing political process our results also suggest that too many new highways were built between 1983 and 2003 these findings are important for three reasons first transportation generally and infrastruc ture in particular are large segments of the economy the median u s household devotes about 18 of its income to road transportation while all levels of government together spend another 200 billion dollars annually overall the value of capital stock associated with road transporta tion in the u s tops 5 trillion dollars united states bureau of transportation statistics 2007 2010 given the magnitude of transportation expenditures it is important that the impact of these expenditures on economic growth be carefully evaluated and not assessed on the basis of the claims of advocacy groups our analysis provides a basis for assessing whether these resources are well allocated our results also provide useful guidance to policy makers charged with planning cities since changes in a city s transportation infrastructure cause changes to the city s employment new transportation infrastructure causes complementary changes in the demand for public utilities and schools our results provide a basis for estimating the magnitude of such changes finally this research is important to furthering our understanding of how cities operate and grow transportation costs are among the most fundamental quantities in theoretical models

contemporaneous and intertemporal child costs equivalent expenditure vs equivalent income scales abstract parents may provide for their children by drawing on savings or borrowing as well as by reducing current consumption this means that child costs may be partly paid from reducing consumption in periods when the children themselves are not in the family static comparisons of consumption costs between households with and without children are therefore affected by the extent to which parents are willing and able to meet child costs through intertemporal transfers this paper analyses the implications of this argument for the estimation of adult equivalent scales and provides empirical illustrations using individual household data

growth and change in human capital across the canadian urban hierarchy 1996 2001 university degree holders in large cities are more prevalent and are growing at a more rapid pace than in smaller cities and rural areas this relatively high rate of growth stems from net migrator

a simple test for convergence of metropolitan income in the united states abstract the prevalent test for income convergence used in many recent studies of convergence across spatial economic units in the united states is to use a regression equation in which income growth is regressed against the initial level of income this is known as convergence that method however has been crtiticized as an instance of galton s fallacy of regression we devise a simple test for the income convergence hypothesis which does not suffer from galton s fallacy and apply it to all of the metropolitan areas of the united states for the period 1969 1995 for the test we use two income measures per capita personal income and average wages our results conclusively support convergence of per capita personal income and of wage per worker for metropolitan areas in the united states we also test for convergence the hypothesis of diminishing dispersion in income among places over time and find no support for the hypothesis

determinants of urban migration evidence from chinese cities this study seeks the causes of variation in the amount of migration to chinese cities over the period of 1995 99 we use a city fixed effect model with lagged values of pull factors for each city

racial diversity and macroeconomic productivity across us states and cities sparber c racial diversity and macroeconomic productivity across us states and cities regional studies racial diversity in the usa continues to rise past analyses have argued that diversity can have both positive and negative consequences the overall macroeconomic effects of diversity within the usa require further examination this paper exploits variation across us regions from 1980 to 2000 to determine whether racial heterogeneity creates gains or losses for states and cities fixed effects analysis indicates that diversity enhances the productivity of cities evidence at the state level is more ambiguous as significant results only appear in random effects specifications sparber c la diversite ethnique et la productivite macroeconomique a travers les etats et les grandes villes aux e u regional studies aux etats unis la diversite ethnique est toujours a la hausse des etudes anterieures ont cherche a affirmer que les consequences de la diversite ethnique peuvent s averer a la fois positives

local decentralization and local economic growth a cross sectional examination of us metropolitan areas this paper builds on the growing empirical literature that explores the relationship between government structure and economic growth it uses a new data set of 314 us metropolitan areas to examine the relationship between local decentralization and local economic growth the results indicate a negative relationship between the central city share of metro area population and economic growth and a positive relationship between both the number of municipalities per 100 000 residents and the number of counties per 100 000 residents and economic growth those findings provide support for the hypothesis that decentralization enhances economic growth

on the distributional aspects of urban growth abstract although many theories of urban growth have broad implications regarding the dynamics of wage inequality little empirical work has explored the issue this paper studies the relationship between the growth of three measures of economic activity population employment and per capita income and a variety of wage dispersion measures across a sample of us metropolitan areas between 1970 and 1990 overall the results indicate a negative association between the two cities experiencing more rapid growth also tend to witness smaller increases or larger decreases in their inequality such findings offer some support to theories stressing growth mechanisms which equalize productivity across workers

public goods institutions human capital and growth evidence from german history what are the origins and consequences of the state as a provider of public goods we study public goods provision established through new laws in german cities during the 1500s cities that adopted the laws subsequently began to differentially produce and attract human capital and to grow faster legal change occurred where ideological competition introduced by the protestant reformation interacted with local politics we study plagues that shifted local politics in a narrow period as sources of exogenous variation in public goods institutions and find support for a causal interpretation of the relationship between legal change human capital and growth

does traffic congestion reduce employment growth abstract this paper examines the impact of traffic congestion on employment growth in large u s metropolitan areas an historic highway plan and political variables serve as instruments for endogenous congestion the results show that high initial levels of congestion dampen subsequent employment growth this finding suggests that increasing the efficiency of public infrastructure can spur local economies counterfactual estimates show that the employment growth returns from modest capacity expansion or congestion pricing are substantial

corporate philanthropy in the u k 1985 2000 some empirical findings this paper briefly reviews the theories that seek to explain the phenomenon of corporate charitable donations and then provides a review of the empirical issues that have arisen in previous studies in this area the findings of an analysis of charitable donations data from the entire u k ftse index for the years 1985 2000 are then reported these findings include the observation of a time related increase in charitable donations which is compared with an earlier study to give a 24 year history of charitable donations in the u k the findings note little responsiveness of the monetary value of charitable donations to the economic performance of firms an international comparison over time against u s trends is also reported and shows how u s corporations have traditionally been more generous than u k firms but that the trend in the u s is downwards membership of a u k based tithing club the percent club is shown to be associated with higher profit performance against non members members charitable contributions against profit are shown to be higher than the ftse mean although short of the 0 5 target figure in cash terms the paper concludes with a brief discussion of these findings in relation to the theoretical positions advanced for corporate philanthropy

evidence on agglomeration economies diseconomies and growth conventional urban economic analysis suggests that a local economy s size is closely related to a number of features including levels of human capital and the availability of specialized inputs which are likely to influence positively the rate at which it accumulates further economic activity at the same time urban theory also suggests that once cities reach a certain level of size these agglomeration benefits begin to peter out while diseconomies rise rapidly consequently we should see an inverted u shaped pattern of growth with respect to economic size rates of growth first rise then fall as size increases this paper shows that while such a pattern is largely absent from recent data on growth in metropolitan area population and employment it emerges strikingly in county level data copyright 2002 john wiley sons ltd

european cities in the knowledge economy towards a typology the shift towards a knowledge based economy seems to favour some well endowed urban areas however not all cities benefit equally this paper discusses the shift towards a knowledge based economy

regional income growth and net migration in sweden 1970 1995 this paper concerns the regional growth pattern in sweden and the purpose is to analyse what factors determine the growth rate of average income and the net migration at the regional level we fin

measuring human capital divergence in a growing economy abstract the stylized fact that the fraction of workers who are college graduates appears to increase more in us cities where the initial share is larger has attracted significant attention furthermore more educated cities appear to grow faster these two trends could portend the divergence of cities by skill with low skill workers segregated in slow growing or declining cities this paper compares measures of skill divergence and finds that relative measures which have the property of scale invariance show no divergence for the period from 1970 to 2010 in addition the relation between skill intensity and city growth appears to be concave so that differences in the growth rate of skill intensity across cities may diminish over time as the average college share of the country rises

intranational risk sharing and its determinants abstract we develop a model of risk sharing in which agents can pool their consumption risks in both national and local markets and then smooth the remaining consumption fluctuations with credit markets estimating the model with a unique dataset on chinese cities we find that the participation rate in risk sharing is low but upon entering the market agents tend to pool risk in the national market rather than the local market the welfare gain from reaching the perfect consumption risk sharing at the national market could be as large as 4 of the perpetual deterministic consumption flow however conditional on the estimated degree of risk sharing participation the welfare gain from pooling all income risks at the national market is only 0 1 empirical analysis on the determinants of city risk sharing reveals that the degree of risk sharing depends on initial economic development and share of gdp contributed by tertiary industry

ethnic diversity and employment growth in english cities there are many reasons why cities with diverse populations may grow faster ethnic diversity might attract human capital tourists or firms increase productivity through diverse approaches to problem solving or ethnic minority entrepreneurship yet there are also reasons to believe that diversity could be harmful by leading to sub optimal provision of public goods or reducing trust or social capital or it may be irrelevant being merely a proxy for class a number of studies have shown both positive and negative relationships between diversity and growth using a range of different measures for diversity this paper asks two questions have more diverse english cities grown faster and does measurement matter is it important to have a multinational population or an ethnically diverse one to answer these questions in this paper a range of models are estimated for employment growth for 53 english cities between 1981 and 2001 the evidence suggests that cities with a high proportion of their populati

human capital and industrialization evidence from the age of enlightenment while human capital is a strong predictor of economic development today its importance for the industrial revolution is typically assessed as minor to resolve this puzzling contrast we differentiate average human capital worker skills from upper tail knowledge both theoretically and empirically we build a simple two sector model where worker skills raise the productivity in both agriculture and manufacturing and scientific knowledge affects the entrepreneurial ability to keep up with a rapidly advancing technological frontier the model predicts that the local presence of knowledge elites is unimportant in the pre industrial era but drives growth thereafter worker skills in contrast are not crucial for growth to measure the historical presence of knowledge elites we use city level subscriptions to the famous encyclopedie in mid 18th century france we show that subscriber density is a strong predictor of city growth after 1750 but not before the onset of french industrialization alternative measures of development confirm this pattern soldier height and industrial activity are strongly associated with subscriber density after but not before 1750 literacy on the other hand does not predict growth finally by joining data on british patents with a large french firm survey from 1837 we provide evidence for the mechanism upper tail knowledge raised the productivity in innovative industrial technology

using spatial econometrics to analyze local growth in sweden lundberg j 2006 using spatial econometrics to analyse local growth in sweden regional studies 40 303 316 the paper investigates factors that determine the average income growth and net migration rates in swedish municipalities during 1981 99 the main issue is to test the hypothesis that conditional on a set of other possible determinants of regional growth the growth rate in one municipality is affected by the growth rates in its neighbouring municipalities the hypothesis of conditional convergence is also tested a positive correlation is found between net migration rates in neighbouring municipalities which suggests that net migration tends to spillover to neighbouring municipalities when it comes to average income growth the results indicate spatial dependence in the error terms during the 1980s however there is no clear evidence in favour of the hypothesis of conditional convergence instead the results predict conditional divergence between municipalities located in the stockholm reg

okun s law in panels of countries and states this article contributes to the empirical literature of okun s law in three respects first in contrast to the limited data used in the existing studies we employ two extensive across countries and across states i e within a country panel data sets to investigate the validity of okun s law second the use of the pooled mean group pmg estimator permits us not to pre filter the data as often done in the current literature and can take into account the possibility of cointegration between unemployment and output third in addition to the short run relationship or cyclical components between unemployment and output we also estimate the long run linkage between these two important variables empirical results show that unemployment and output are long run cointegrated irrespective of using country or state level data moreover the unemployment output linkages are found to be negative and highly significant both in the short and long run our results not only confirm the validity of okun s law

power couples changes in the locational choice of the college educated 1940 1990 college educated couples are increasingly located in large metropolitan areas these areas were home to 32 percent of all college educated couples in 1940 39 percent in 1970 and 50 percent in 1990 we investigate whether this trend can be explained by increasing urbanization of the college educated or the growth of dual career households and the resulting severity of the colocation problem we argue that the latter explanation is the primary one smaller cities may therefore experience reduced inflows of human capital relative to the past and thus become poorer

gender interactions within hierarchies evidence from the political arena this paper studies gender interactions within hierarchical organizations using a large data set on the duration of italian municipal governments elected between 1993 and 2003 a municipal government can be viewed as a hierarchy whose stability over time depends on the degree of cooperation between and within ranks we find that in municipalities headed by female mayors the probability of early termination of the legislature is higher this result persists and becomes stronger when we control for municipality fixed effects as well as for non random sorting of women into municipalities using regression discontinuity in gender mixed electoral races decided by a narrow margin the likelihood that a female mayor survives until the end of her term is lowest when the council is entirely male and in regions with less favourable attitudes towards working women this evidence is suggestive that group dynamics are an important factor in driving the gender difference other interpretations receive less support in the data our results may provide an alternative explanation for the underrepresentation of women in leadership positions

the growth and variability of regional taxes an application to italy abstractthe growth and variability of regional taxes an application to italy regional studies this paper investigates the potential long term growth and short term cyclical stability of the italian regional tax system short and long run elasticities with respect to regional gross domestic product gdp are estimated between 2001 and 2012 for the surtax on central personal income tax rpit and for the regional tax on productive activities rtpa cyclical reactions are more marked for the rtpa and higher in the southern regions significant long run growth of the rpit and rtpa on the other hand is found only in the northern regions the results suggest that the behaviour of regional taxes may increase the italian north south gap and cast some doubt on these taxes in financing essential public services such as health in each region

the drivers of local income inequality a spatial bayesian model averaging approach this study analyzes the drivers of local income inequality in spain it derives a novel data set of inequality metrics for a sample of municipalities over the period 2000 06 spatial bayesian model

zipf s law for cities an explanation zipf s law is a very tight constraint on the class of admissible models of local growth it says that for most countries the size distribution of cities strikingly fits a power law the number of cities with populations greater than s is proportional to 1 s suppose that at least in the upper tail all cities follow some proportional growth process this appears to be verified empirically this automatically leads their distribution to converge to zipf s law

the area and population of cities new insights from a different perspective on cities the distribution of city populations has attracted much attention in part because it constrains models of local growth however there is no consensus on the distribution below the very upper tail because available data need to rely on legal rather than economic definitions for medium and small cities to remedy this difficulty we construct cities from the bottom up by clustering populated areas obtained from high resolution data we find that zipf s law for population holds for cities as small as 5 000 inhabitants in great britain and 12 000 inhabitants in the us we also find a zipf s law for areas jel r11 r12 r23

stratification and spatial segregation of human capital as determinants of metropolitan productivity in the united states this paper explores the dynamics of how the human capital embodied in metropolitan populations might impact metropolitan productivity three aspects of human capital are examined the average aggregate level of human capital stratification according to human capital and spatial segregation according to human capital these are measured for the 100 largest metropolitan areas in the us for 1970 1980 and 1990 and then tested as explanatory variables of metropolitan productivity econometric analysis confirms a strong relationship between higher average levels of human capital and higher productivity and growth stratification appears negatively correlated with productivity in 1970 and 1980 but positively correlated in 1990 segregation appears negatively correlated with productivity in the 1970s and in 1990 when controlling for stratification

industry churning and the evolution of cities evidence for germany abstract in this paper we show that the recent model by gilles duranton duranton g 2007 urban evolutions the fast the slow and the still american economic review 97 197 221 performs remarkably well in replicating the city size distribution of west germany much better than the simple rank size rule known as zipf s law the main mechanism of this theoretical framework is the churning of industries across cities little is known in urban economics about the determinants of local industry turnover so far we present an empirical analysis of the excess churning index for west german cities which describes the strength of intra city industry reallocations over time we find that urban growth and industry turnover are not notably correlated some but not all fast growing cities have notably changed secondly human capital is positively related to growth and turnover but only among successful cities industrial change within unsuccessful cities is driven by the disappearance of old fashioned and declining sectors such as agriculture or mining on a more general level our results suggest that the recent model by duranton is a powerful description of the urban growth process still there are some aspects that are not captured by that model which are at the core of other theories of urban growth

do economic reforms accelerate urban growth the case of china this paper examines the determinants of city growth in china evidence is provided that economic reforms played an important role in accelerating urban growth the relative magnitude of the state s

cultural diversity and economic growth evidence from the us during the age of mass migration we exploit the large inflow of immigrants to the us during the 1870 1920 period to examine the effects that within county changes in the cultural composition of the us population had on output growth we construct measures of fractionalization and polarization to distinguish between the different effects of cultural diversity our main finding is that increases in cultural fractionalization significantly increased output while increases in cultural polarization significantly decreased output we address the issue of identifying the causal effects of cultural diversity by using the supply push component of immigrant inflows as an instrumental variable

political jurisdictions in heterogeneous communities we investigate whether political jurisdictions form in response to the trade off between economies of scale and the costs of a heterogeneous population we consider heterogeneity in income race ethnicity and religion and we test the model using american school districts school attendance areas municipalities and special districts we find strong evidence of a trade off between economies of scale and racial heterogeneity we also find evidence of a trade off between economies of scale and income heterogeneity conversely we find little evidence that ethnic or religious heterogeneity shapes jurisdictions to clarify the direction of causality between heterogeneity and jurisdictions we exploit shocks to racial heterogeneity generated by the two world wars

education social cohesion and economic growth analysis of the contribution of education to growth through its role in promoting a common culture indicates that when different cultural groups separately determine the social content of their school curricula excessive polarization can result with less than optimal growth the optimal trajectory involves a gradual reciprocal convergence of school curricula towards the middle ground this may be difficult to implement in a political context in which all agents are identified with one group or another when curricula are determined by legislative bargaining centralization of schooling may result in overly rapid homogenization in some cases and perhaps surprisingly excessive polarization in others this abstract was borrowed from another version of this item

cities skills and regional change glaeser e l ponzetto g a m and tobio k cities skills and regional change regional studies one approach to urban areas emphasizes the existence of certain immutable relationships such as zipf s or gibrat s law an alternative view is that urban change reflects individual responses to changing tastes or technologies this paper examines almost 200 years of regional change in the united states and finds that few if any growth relationships remain constant including gibrat s law education does a reasonable job of explaining urban resilience in recent decades but it does not seem to predict county growth a century ago after reviewing this evidence a simple model of regional change is presented and estimated where education increases the level of entrepreneurship human capital spillovers occur at the city level because skilled workers produce more product varieties and thereby increase labour demand it is found that skills are associated with growth in productivity or entrepreneurship not

globalization and the skilled city abstract the location of economic activity both across and within countries has undergone dramatic shifts over the last five decades three key trends stand out first cross country inequality has declined as many developing countries have grown rapidly second economic geography within countries has instead grown more unequal in both the developed and the developing world third within country spatial disparities have grown mainly because of the disproportionate success of skilled cities in this paper i develop a model that jointly explains these patterns as a consequence of deepening international economic integration my model explains the faster population and output growth of skilled cities as well as their tendency to increase their initial skill advantage consistent with the evidence my theory predicts a non monotonic path of urban growth in developed countries the model predicts a future shift in worldwide urban hierarchies as some developing world cities overtake unskilled cities in industrialized countries along global supply chains

establishment size and local employment growth in a sample of more than 2000 u s counties smaller average establishment size is generally associated with faster subsequent growth rates of sectoral employment both within and across sectors the estimated effects are large in magnitude and thus economically important and are consistent with several theories previously developed these findings contribute toward a more precise understanding of the role of small businesses in economic growth and labor markets

why are population flows so persistent abstract a neoclassical model of local growth is developed by integrating the static equilibrium underlying compensating differential theory as the steady state of a neoclassical growth model numerical results show that even very small frictions to labor and capital mobility along with small changes in local productivity or local quality of life suffice to cause highly persistent population flows wages and house prices in contrast jump most of the way to their new steady state the model suggests that cross sectional regressions of local population growth can help to identify past and present changes in the determinants of representative agent welfare more generally it provides a framework for interpreting observed local growth rates

what is different about urbanization in rich and poor countries cities in brazil china india and the united states abstract are the well known facts about urbanization in the united states also true for the developing world we compare american metropolitan areas with analogous geographic units in brazil china and india both gibrat s law and zipf s law seem to hold as well in brazil as in the u s but china and india look quite different in brazil and china the implications of the spatial equilibrium hypothesis the central organizing idea of urban economics are not rejected the india data however repeatedly rejects tests inspired by the spatial equilibrium assumption one hypothesis is that spatial equilibrium only emerges with economic development as markets replace social relationships and as human capital spreads more widely in all four countries there is strong evidence of agglomeration economies and human capital externalities the correlation between density and earnings is stronger in both china and india than in the u s strongest in china in india the gap between urban and rural wages is huge but the correlation between city size and earnings is more modest the cross sectional relationship between area level skills and both earnings and area level growth are also stronger in the developing world than in the u s the forces that drive urban success seem similar in the rich and poor world even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop

why has house price dispersion gone up we calibrate a dynamic general equilibrium island model to investigate the 30 year increase in the level of house prices and their dispersion across u s metropolitan areas the model is based on two main assumptions households o w in and out metropolitan areas in response to local productivity shocks and the housing supply cannot adjust instantly because of technological and regulatory constraints the calibration reveals that the observed tightening of housing supply regulation cannot quantitatively account for the rise in the level and dispersion of house prices in equilibrium workers o w out of tightly regulated towards less regulated metropolitan areas undoing most of the price impact of local supply restrictions in contrast the observed increase in wage dispersion across metropolitan areas does create the observed increase in the level and dispersion of house prices workers o w towards exceptionally productive metropolitan areas and drive house prices up the calibration also suggests that the welfare eects of housing supply regulation are large when wages become more dispersed

the economic performance of cities a markov switching approach abstract this paper examines the determinants of employment growth in metro areas to obtain growth rates we use a markov switching model that separates a city s growth path into two distinct phases high and low each with its own growth rate the simple average growth rate over some period is therefore the weighted average of the high phase and low phase growth rates with the weight being the frequency of the two phases we estimate the effects of a variety of factors separately for the high phase and low phase growth rates growth in the high phase is related to both human capital and industry mix while growth in the low phase is related to industry mix only specifically the relative importance of manufacturing overall our results strongly reject the notion that city level characteristics influence employment growth equally across the phases of the business cycle

population growth and local public finance in japanese cities the determinants of japanese city population growth for the period 2000 to 2005 are empirically examined with particular attention to local public finance the selection of one fiscal indicator fi from four alternatives ordinary balance ratio obr ratio of outstanding borrowing rob to the ordinary account debt service payment ratio dspr and financial power index fpi and the consideration of spatial auto correlation provide 12 regression models in each regression six additional explanatory variables are considered with reference to earlier empirical studies empirical results suggest that 1 three fis excluding dspr are significant and 2 the number of local government officers and the ratio of graduates of not less than junior college are highly significant in all specifications

aggregate metropolitan employment growth and the deconcentration of metropolitan employment abstract in this paper we document that the disparity in employment densities across us metropolitan areas has lessened substantially over the postwar period to account for this deconcentration of metropolitan employment we 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 is 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

take the money and run political turnover rent seeking and economic growth abstract we find a negative and significant relationship between gubernatorial turnover and u s state economic growth although our finding of an inverse relationship between growth and political instability may seem to contradict olson s 1982a famous hypothesis regarding the growth retarding nature of political stability such constitutional political changes were not primarily what olson had in mind we argue that enhanced political turnover is associated with more rent seeking since payoffs to focusing on special interest redistributive policies vs general growth enhancing ones are greater for less durable regimes therefore we interpret our evidence as supportive of olson s broader argument concerning the negative affect of rent seeking behavior on growth

ethnic tensions and social infrastructure ethnic tensions may restrict economic growth through a number of infrastructure channels we extend this literature by 1 using a broad measure of ethnic tensions 2 considering a variety of measures of social infrastructure for a panel of 87 countries across 16 years and 3 explicitly addressing the endogeneity of ethnic tensions we find ethnic tensions significantly retard the formation of social infrastructure and by extension impose an unnecessary cap on growth and development as such governments would well serve the interests of their populaces by enacting policies conducting politics and carrying out their daily functions in ways that serve to dampen ethnic tensions rather than the reverse which too often seems the case

human capital divergence and the size distribution of cities is gibrat s law obsolete this article studies how the changing geographic distribution of skilled workers in the us affects theoretical models that use gibrat s law to explain the size distribution of cities in the empiri

exclusionary policies in urban development under servicing migrant households in brazilian cities localities in developed countries often enact regulations to deter low income households from moving in in developing countries such restrictions lead to the emergence of informal housing sectors to deter low income migrants localities in developing countries withhold public services to the informal housing sector using a large sample of brazilian localities we examine migration and exclusion focusing on the public provision of water to small houses where low income migrants are likely to live withholding water connections reduces the locality growth rate particularly of low education households in terms of service provision during dictatorship in brazil we find evidence of strategic exclusion where localities appear to withhold services to deter in migration we also find evidence of strategic interactions among localities within metro areas in their setting of service levels if one locality provides more services to migrant households other localities respond by withholding service

sectoral shares specialisation and metropolitan wages in the united states 1969 96 we investigate the effect of specialisation upon the level of metropolitan wage per worker specialisation is measured by the share of metropolitan earnings in each of five traded goods and services sectors sectoral specialisations are assumed to be determinants of location specific productivity which in turn is treated as a term in a metropolitan production function panel data are used for estimating that production function for 313 metropolitan areas in the us over the long period 1969 96 and two shorter periods we find that some specialisations raise average metropolitan wages some lower it and some have no effect and that the effects of specialisation differ by time period

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

increasing social returns to human capital evidence from hungarian regions abstractincreasing social returns to human capital evidence from hungarian regions regional studies using individual level data from 2002 to 2008 this paper estimates augmented mincerian wage equations to analyze social returns to human capital in hungary the results show that geographically localized human capital externalities have a strong productivity effect on the wages of local workers but the strength of this effect falls short of the private returns a one year increase in the average schooling of the local labour force has a 3 average external effect on the wages of local workers

does government performance matter the effects of local government on urban outcomes in england this paper applies an extensive literature that argues that political leadership and local government activity enhance urban performance using the state of the cities database of 56 primary urban areas in england it tests for the impact of consolidated governance political stability planning performance average service performance local government capacity and planning development expenditure on jobs and population growth from 1995 to 2005 the regression analysis finds that the competence of service delivery is weakly associated with full time jobs growth and that a consolidated governance structure is weakly associated with greater population growth none of the other tests is statistically significant overall the findings place doubt on the salience of the political determinants of economic performance in english cities for the period in question

the melting pot and school choice abstract in the united states parents are offered free public education in the mainstream culture but must pay the full cost of tuition if they educate their children privately this creates strong economic incentives for remaining within the public system which promotes the assimilation of minorities a pareto improvement can be achieved by subsidizing private education in exchange for modifying its social content so as to reduce polarization popular opposition to voucher programs that facilitate school choice without regulating cultural content may partly reflect voters concerns that such programs threaten to erode the common ground created by public education

determinants of income growth in metropolitan and nonmetropolitan labor markets this article analyzes determinants of growth across labor markets in the united states using a production function approach based on four inputs labor manufacturing investment human capital investment and public capital investment we find little role for public capital investment in growth but that manufacturing investment spurred growth in nonmetropolitan areas in contrast to metropolitan areas we also find that human capital investment mattered more for metropolitan areas than for nonmetropolitan areas further the presence of more colleges and universities more household amenities and lower tax rates are all found to have encouraged human capital accumulation in u s labor markets copyright 2008 oxford university press

is tolerance good or bad for growth we investigate how tolerance as measured by attitudes toward different types of neighbors affects economic growth in a sample of 54 countries unlike previous studies by richard florida and others we find that tolerance toward homosexuals is negatively related to growth for tolerance toward people of a different race we do not find robust results but the sign of the estimated coefficients is positive suggesting that inclusion of people irrespective of race makes good use of productive capacity we propose mechanisms to explain these divergent findings which clarify why different kinds of tolerance may be of different economic importance

measuring the impact of meat packing and processing facilities in nonmetropolitan counties a difference in differences approach considerable controversy exists regarding the costs and benefits of growth in the meat packing and processing industry for rural counties this study investigates the effects of this industry on social and economic outcomes in nonmetropolitan counties of 23 midwestern and southern states from 1990 to 2000 results suggest that as the meat packing industry s share of a county s total employment and wage bill rises total employment growth increases however employment growth in other sectors slows as does local wage growth industry growth has little impact on local crime rates or on growth of government spending on education health or police protection