For more than a century, educated cities have grown more quickly than comparable cities with less human capital. This fact survives a battery of other control variables, metropolitan area fixed effects and tests for reverse causality.

The researchers find that skilled cities are growing because they are becoming more economically productive (relative to
less skilled cities), not because these cities are becoming more attractive places to live.

Most surprisingly, the researchers find evidence suggesting that the skills-city growth connection occurs mainly in declining areas and occurs in large part because skilled cities are better at adapting to economic shocks. Skills appear to permit adaptation.

Between 1980 and 2000, the population of metropolitan areas where less than 10 percent of adults had college degrees in 1980, grew on average by 13 percent. Among metropolitan areas where more than 25 percent of adults had college degrees, the average population growth rate was 45 percent. For more than a century, in both the United States and Great Britain, cities with more educated residents have grown faster than comparable cities with less human capital. There is no consensus, however, on the causes or implications of this relationship.

The results in the paper suggest that city growth can be promoted with strategies that increase the level of local human capital. At the regional or metropolitan level, attracting high human capital workers may require provision of basic services, amenities and quality public schools that will lure the most skilled. Conversely, redistributive policies at the local level have to be carefully designed as they may have the undesired side effect of repelling the skilled and deter growth.

Generating new technologies locally does not seem as important as having the capacity to adapt them. Providing basic quality education (maximizing success rates in high school graduation) may both produce and attract the educated. Since local tax bases are heterogeneous, state and federal funds can play a role in avoiding “low education traps” in ailing cities.

Harvard University - John F. Kennedy School of Government - Department of Economics
Edward L. Glaeser, tel. +1 6174962150

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01/12/2003

Edward L. Glaeser and Albert Saiz

research

Urban Policy > Economy knowledge & employment > Urban economy

Competitiveness