Working Paper: NBER ID: w10191
Authors: Edward L. Glaeser; Albert Saiz
Abstract: 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. We also 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, we 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. As in Schultz (1964), skills appear to permit adaptation.
Keywords: human capital; urban growth; metropolitan areas
JEL Codes: J1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher initial levels of education (I24) | greater subsequent growth (O49) |
| skills induce growth (J24) | productivity increases (O49) |
| education levels (I24) | future wage and housing price growth (J39) |
| low levels of human capital (J24) | urban decline (R11) |
| low levels of human capital (J24) | falling housing prices (R31) |
| skilled cities adapt better to economic shocks (R23) | alignment with reinvention city hypothesis (R11) |