Urban Growth in the 1990s: Is City Living Back?

The 1990s were an unusually good decade for the largest American cities and, in particular, for the cities of the Midwest. However, fundamentally urban growth in the 1990s looked extremely similar to urban growth during prior post–war decades. The growth of cities was determined by three main trends: (1) cities with strong human capital bases grew faster than cities without skills, (2) people moved to warmer, drier places, and (3) cities built around the automobile replaced cities that rely on public transportation. Although the negative impact of population density diminished slightly in the 1990s, there is no real evidence for a return to large, dense cities.     

THE COMPLEMENTARITY BETWEEN CITIES AND SKILLS*

ABSTRACT There is a strong connection between per‐worker productivity and metropolitan area population, which is commonly interpreted as evidence for the existence of agglomeration economies. This correlation is particularly strong in cities with higher levels of skill and virtually nonexistent in less skilled metropolitan areas. This fact is particularly compatible with the view that urban density is important because proximity spreads knowledge, which either makes workers more skilled or entrepreneurs more productive. Bigger cities certainly attract more skilled workers, and there is some evidence suggesting that human capital accumulates more quickly in urban areas.     

Consumer city

Urban economics has traditionally viewed cities as having advantagesin production and disadvantages in consumption. We argue thatthe role of urban density in facilitating consumption is extremelyimportant and understudied. As firms become more mobile, thesuccess of cities hinges more and more on cities' role as centresof consumption. Empirically, we find that high amenity citieshave grown faster than low amenity cities. Urban rents havegone up faster than urban wages, suggesting that the demandfor living in cities has risen for reasons beyond rising wages.The rise of reverse commuting suggests the same consumer cityphenomena.l     

INEQUALITY IN CITIES*

ABSTRACT Much of the inequality literature has focused on national inequality, but local inequality is also important. Crime rates are higher in more unequal cities; people in unequal cities are more likely to say that they are unhappy. There is a negative association between local inequality and the growth of city‐level income and population, once we control for the initial distribution of skills. High levels of mobility across cities mean that city‐level inequality should not be studied with the same analytical tools used to understand national inequality, and policy approaches need to reflect the urban context. Urban inequality reflects the choices of more and less skilled people to live together in particular areas. City‐level skill inequality can explain about one‐third of the variation in city‐level income inequality, while skill inequality is itself explained by historical schooling patterns and immigration. Local income also reflects the substantial differences in the returns to skill across, which are related to local industrial patterns.