Working Paper: NBER ID: w26839
Authors: Edward L. Glaeser
Abstract: American cities have experienced a remarkable renaissance over the past 40 years, but in recent years, cities have experienced considerable discontent. Anger about high housing prices and gentrification has led to protests. The urban wage premium appears to have disappeared for less skilled workers. The cities of the developing world are growing particularly rapidly, but in those places, the downsides of density are acute. In this essay, I review the causes of urban discontent and present a unified explanation for this unhappiness. Urban resurgence represents private sector success, and the public sector typically only catches up to urban change with a considerable lag. Moreover, as urban machines have been replaced by governments that are more accountable to empowered residents, urban governments do more to protect insiders and less to enable growth. The power of insiders can be seen in the regulatory limits on new construction and new businesses, the slow pace of school reform and the unwillingness to embrace congestion pricing.
Keywords: No keywords provided
JEL Codes: H70; R10; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| urban resurgence (R11) | urban discontent (R23) |
| urban resurgence (R11) | public sector efficiency (H83) |
| high housing prices (R31) | urban discontent (R23) |
| wealthier individuals (D14) | high housing prices (R31) |
| limited supply (Q31) | high housing prices (R31) |
| urban density (R11) | upward mobility for less skilled workers (J62) |
| disappearance of urban wage premium (J69) | less skilled workers (F66) |