The Location of Services in the Urban Hierarchy and the Regions of the United States

We use regression and factor analyses to explain intermetropolitan variation in the proportion of jobs in disaggregated service sectors in American metropolitan areas. Central place theory postulates of centrally located establishments serving a surrounding complementary region partially explain the positive relationship between metropolitan size and the proportion of jobs in an area in services. Regional variation in demand following several decades of substantial shifts in population and economic output is an additional influence. Intermetropolitan clustering of service sectors is also occurring. A factor analysis of employment proportions in twenty-two disaggregate service sectors identified five intersectoral service clusters. The factor analysis accounted for substantially more variance than the regression equations. We interpret this result as evidence of the emergence of service-based spatial industrial complexes. We argue that agglomeration of information-intensive intermediate services is driven by an attraction to labor markets endowed with pools of skilled professionals who can flexibly apply their talents in a variety of sectors. Unusual demographic characteristics of some metropolitan areas probably explain clusters of final demand services.