Employment Risk in U.S. Metropolitan and Nonmetropolitan Regions: the Influence of Industrial Specialization and Population Characteristics

Abstract.  A dynamic labor market model is used to motivate the inclusion of population characteristics and industrial structure as determinants of regional employment instability. We examine how these factors influence regional employment instability using data from both metropolitan and nonmetropolitan regions in the United States. We find that population characteristics are important determinants of employment volatility and that increased industrial specialization (reduced diversification) increases employment volatility, but the magnitude of that influence drops substantially once population characteristics are considered. We also find that the influence of population characteristics and industrial specialization varies significantly across metropolitan and nonmetropolitan regions.     

School quality and rural in-migration: Can better rural schools attract new residents?

Studies in the nonmetropolitan population change literature have largely focused on the role of natural amenities and economic restructuring, but few have focused on the role of public services. This paper addresses the question of whether public services in nonmetropolitan counties, specifically the outcomes of public schools, could attract migrants. We use a Poisson regression technique little-used in the migration literature to control for push and pull factors driving migration patterns and control for school quality. Results show that better schools can draw migrants to nonmetropolitan areas. Marginal effects are larger for nonmetropolitan counties not adjacent to metropolitan areas.     

A NOTE ON THE DIFFERENTIAL REGIONAL EFFECTS OF INCOME INEQUALITY: EMPIRICAL EVIDENCE USING U.S. COUNTY‐LEVEL DATA

This note examines the correlation between income inequality and economic growth using a panel of income distribution data for 3,109 counties of the U.S. Using the System Generalized Method of Moments (GMM) approach, we find that for the entire sample of 3,109 counties, an increase in a county's level of inequality has a significant negative relationship with future economic growth. In reality, however, the magnitude, sign, and significance of this relationship is not necessarily uniform across all regions of the U.S., motivating the need to examine regional differentials in the relationship between inequality and growth. Consequently, we split our dataset into metropolitan and nonmetropolitan counties, into the eight Bureau of Economic Analysis regions, and into regions of different political affiliation and economic‐dependence typology. Our results show considerable heterogeneity in the relationship between inequality and growth across these regions.     

SPREAD AND BACKWASH EFFECTS FOR NONMETROPOLITAN COMMUNITIES IN THE U.S.

Few studies empirically estimate the effects of metropolitan growth on nonmetropolitan communities at a national scale. This paper estimates the growth effects of 276 MSAs on population in 1,988 nonmetropolitan communities in the United States from 2000 to 2007. We estimate the distance for growth spillovers from MSAs to nonmetropolitan communities and test the assumption that a single MSA influences growth. We compare three methods of weighting cities’ influence: nearest city only, inverse‐distance, and relative commuting flow to multiple cities. We find the inverse‐distance approach provides slightly more reliable and theoretically supportable results than the traditional nearest city approach.     

A simultaneous equations model of migration and economic change in nonmetropolitan areas

A simultaneous equations model of migration and economic growth in nonmetropolitan regions of the United States is estimated using data for 1960-1970. The dependent variables considered include in-migration, out-migration, growth in employment, and growth in income. The findings indicate that there is a definite link between the patterns of economic and demographic change in nonmetropolitan areas but that it differs in important respects from that which has been observed in metropolitan areas.     

ENTREPRENEURSHIP,INFORMATION, AND GROWTH

We examine the contribution to economic growth of entrepreneurial marketplace information within a regional endogenous growth framework. Entrepreneurs are posited to provide an input to economic growth through the information revealed by their successes and failures. We empirically identify this information source with the regional variation in establishment births and deaths. To account for the potential endogeneity caused by forward‐looking entrepreneurs, we utilize instruments based on historic mining activity. We find that the information spillover component of local establishment birth and death rates have significant positive effects on subsequent entrepreneurship and employment growth for U.S. counties and metropolitan areas.     

Are Spells of Unemployment Longer in Nonmetropolitan Areas? Nonparametric and Semiparametric Evidence

I use nonparametric and semiparametric proportional hazard models to examine whether individuals resident in nonmetropolitan areas experience lower per period rates of exit from unemployment following job loss than metropolitan area residents. Results show that between 1989 and 1993 per period cumulative rates of exit from unemployment were slightly higher in nonmetropolitan areas, mainly due to nonmetropolitan–metropolitan differences in individual characteristics and local economic conditions. Employment density is found to have a positive association with rates of exit of unemployment in metropolitan areas but not in nonmetropolitan areas.     

The role of aviation networks for urban development

City officials are continuously working to attract airlines willing to fly to new destinations. The inherent expectation is that a more extensive aviation network stimulates economic growth. This paper investigates empirically the causal implication of this hypothesis. Using data on nonstop flights by origin and destination over the period 1984–2013, we propose a new measure for a metropolitan area's connectivity to the national aviation network. We then use this measure to investigate its contribution to local economic development, as captured by the growth in population, in total employment, in per-capita income, and new firm entry. To ensure causality, we use instrumental variable methods that exploit geography and destination airports growth as a way to capture the exogenous variation in the likelihood to add new travel routes. Our results suggest that a metropolitan area's air connectivity, resulting from an expansive local aviation network, has a positive effect on population, on employment and on the number of businesses established in that location.     

HISTORY,INSTITUTIONS, AND CITIES: A VIEW FROM THE AMERICAS*

ABSTRACT Every nation, formally or informally, defines and establishes the lines of political and fiscal authority among its national, regional, and local governments. Historically, centralized governments tend to restrict the power and autonomy of provincial and local governments. In this paper, we exploit the quasi‐experimental distribution of political institutions in the Americas caused by variation in European colonial experience to examine the impact of institutions on urban and local development, specifically on the degree of urban primacy, the size distribution of cities, the number and density of local government units, and the fragmentation of metropolitan areas. We argue that centralization of political power at the national level, as experienced in many countries in Latin America, contributes to urban primacy and a size distribution of cities favoring large cities. Additionally, even in more politically decentralized countries such as Canada and the U.S., variance in political centralization at the provincial (state) level over local governments led to significant divergences in urban primacy, the distribution of city sizes, as well as the form, number, and density of local governments. While we cannot rule out the importance of other factors, our findings suggest that political centralization affects spatial economic development.     

Anomalies in red and blue: Exceptionalism in American electoral geography

Red and Blue America has become the spatial metaphor for an electoral divide on two main dimensions – a nonmetropolitan Red and a larger metropolitan Blue, and a traditionalist Red and a more modern Blue. In this paper, we evaluate the validity and consistency of this conventional wisdom, using both the 2000 and 2004 presidential elections results by county. While previous research has underscored the overall pattern and its accuracy, we choose instead to explore mainly the anomalous results: “metropolitan” or “modern” areas that President Bush carried, and “nonmetropolitan” and “traditional” areas that Democrats won. We develop a typology of the anomalous counties and carry out a simple analysis of characteristics that help show how and why they are anomalous. We then compare the 2000 and 2004 results to discover anomalous areas, counties which switched parties or which became more or less partisan. Trends between 2000 and 2004 suggest a weakening of the metropolitan and nonmetropolitan dimension but a deepening of the cultural one, although we note as well that most of the electorate does not place itself at these partisan extremes. We relate these findings to longer term structural changes in American society, and to Republican strategies to mobilize insecure voters. Finally, we lay out an agenda to look at a sample of counties, using qualitative methods, in order to understand these anomalous results.     

The Causes of Regional Variations in U.S. Poverty: A Cross-County Analysis

The persistence of poverty in the modern American economy, with rates of poverty in some areas approaching those of less advanced economies, remains a central concern among policy makers. Therefore, in this study we use U.S. county-level data to explore potential explanations for the observed regional variation in the rates of poverty. The use of counties allows examination of both nonmetropolitan area and metropolitan area poverty. Factors considered include those that relate to both area economic performance and area demographic composition. Specific county economic factors examined include economic growth, industry restructuring, and labor market skills mismatches.     

Exploring the links between political structure and metropolitan growth

Considerable scholarship documents a causal link between metropolitan growth and the resultant number and arrangement of local governments in metropolitan areas. Only scant research explores the reverse phenomena, that patterns of local government structure influence metropolitan population growth. Yet ample social science theory and case study evidence suggest support for such a causal link. This study examines empirically the influence of levels and changes in political structure on metropolitan population growth for 129 large US metropolitan areas between 1962 and 1982. The analysis extends previous research in two ways: first, by replacing aggregate measures of political fragmentation with a more sophisticated set of variables that capture different aspects of the multifaceted concept of political structure; and second, by examining the dynamic association between change in political structure and metropolitan growth. The results reveal mixed support for theories linking political structure to metropolitan growth. Of methodological importance is the finding that different dimensions of political structure interact differentially with metropolitan growth, suggesting that traditional aggregate measures of political structure obscure more than they reveal.     

How does transportation shape intrametropolitan growth? An answer from the Regional Express Rail

This paper analyzes the influence of transportation infrastructure, and in particular of the Regional Express Rail (RER), on employment and population growth in the Paris metropolitan area between 1968 and 2010. In order to make proper causal inference, we rely on historical instruments and control for all other transportation modes that could be complement or substitute to the RER. Our results show that proximity to an RER station increases employment and population density and, in particular, employment and population growth. The latter effects are higher in municipalities located near RER stations and close to employment (sub)centers. They are also found to be particularly strong for jobs in the service sector, for factory workers, and for highly educated population. We find no impact of the RER expansion on employment growth during the first part of the period, while the effect on population growth appears earlier but declines over time.     

美国县制演化及其对中国县制改革的启示

本文基于文献资料比较系统地考察了美国县制的起源、模式及特征,重点总结了工业社会到来时美国县制发生的危机、原因、对策和结果,论述了美国县制在后工业社会崛起的机理,最后总结了美国县制的演变规律及其对我国县制改革的启示。     

LOCAL INPUT AND PRODUCTIVITY GROWTH IN U.S. MANUFACTURING: 1972–2002*

ABSTRACT This research analyzes manufacturing growth and decline across metropolitan and nonmetropolitan regions during the 1972–2002 period. We decompose real value added growth across local labor market areas in the lower 48 U.S. states into contributions from labor, capital, and total factor productivity. We then estimate a model describing the long‐run growth of labor, capital, and productivity and find that increased productivity increases the growth of labor and capital, as well as a positive correlation between labor and capital stock growth. We also find evidence that human capital investment and agglomeration economies encourage productivity growth, while unionization discourages it.     

Natural disasters and relief assistance: Empirical evidence on the resilience of U.S. counties using dynamic propensity score matching

This paper utilizes a novel dynamic propensity score matching approach for multiple cohorts of U.S. counties between 1989 and 1999 to examine local economy resilience to rare natural disasters. Affected counties are sorted based on disaster intensity and are carefully matched to similar counties that did not experience a disaster. A difference‐in‐difference estimator compares trends of affected counties’ postdisaster business establishments, employment, and payroll to counterfactual trends in the matched counties. All affected counties experienced short‐run drops in economic activity that was particularly noticeable in higher‐intensity disasters. In the longer run, less distressed counties returned to their estimated counterfactual trends, but counties with lower predisaster socioeconomic conditions still lagged in growth, particularly in cases of lower‐intensity disasters. Policymakers can use this information to better prepare responses to future disasters.     

HOW DO DIFFERENCES IN PROPERTY TAXES WITHIN CITIES AFFECT URBAN SPRAWL?*

ABSTRACT We develop a duocentric‐city model and show that the ratio between the property tax in the suburbs and in the center has an ambiguous impact on the size of the city. We test this model by using a dataset of effective property tax rates which we developed using GIS techniques for central cities and suburbs in 445 urbanized areas. Results from the empirical analyses suggest that a lower property tax rate in the suburbs as compared to the central city is associated with more expansive urban growth and a greater level of decentralization of population and employment.     

MUNICIPAL AMALGAMATION AND THE GROWTH OF THE LOCAL PUBLIC SECTOR IN SWEDEN*

ABSTRACT. The proposition that a decentralized structure of local governments can effectively constrain public sector growth is empirically investigated. Data on Swedish municipal sector size for the 1942–87 period are analyzed within the context of a median voter model. The results indicate that decentralization, measured by the number of units of local government serving a given population, constrains the influence of institutional factors (e.g., rent seeking, bureaucracy) on local budgets as long as these units exceed some minimal threshold size. The findings support the view that communities should be given the flexibility to determine their own ideal pattern of local governments.     

Leaves in the wind? Local policies of small and medium-sized towns in metropolitan regions

Small and medium-sized towns (SMSTs) contribute to the economic performance of whole metropolitan regions. However, the variety of factors that influence the economic development of SMSTs is understudied and the impact and relevance of their local policies are especially unclear. This article studies local policies of SMSTs within the metropolitan region of Zurich (Switzerland) and the impact of local policies on the economic specialization of these towns. Switzerland serves as an interesting context in which to study SMSTs, particularly those in metropolitan regions, due to their constant growth and the high local autonomy enjoyed by Swiss local governments. Using a multiple case study design that relies on a pair-wise comparison, we find that the economic specialization of SMSTs can mainly be explained by factors that are exogenous to local policy-making such as the town’s location and its connectivity. Land-use strategies are the only local policies that can influence the economic specialization of SMSTs. Therefore, SMSTs are well advised to invest in professionalized land-use departments and to coordinate their land-use strategies with neighbouring jurisdictions.     

Difficult but Not Impossible: The ANC's Decentralization Strategy in South Africa

As the neo‐liberal project has spread across the globe, decentralization has been a key component of it. In South Africa, the neo‐liberal macro‐economic strategy of the African National Congress (ANC) involves support for fiscal and administrative decentralization partly as a way to bring the private sector into basic service delivery and supposedly to make local government more efficient and effective. However, the ANC also sees decentralization as a way to empower the historically disadvantaged black population. Community‐based public–private partnerships have been one of the chief initiatives in this regard. In the metropolitan municipality of Port Elizabeth, small black contracting companies have been hired and trained to dispose of waste, construct roads and build houses. While not free of tensions and problems, this approach to decentralization has fostered a form of democratic development. This article uses examples from the Port Elizabeth experience to test and reflect upon a number of issues which are raised in the literature on decentralization.