Cities & Jobs
According to 1990 census data, workers who live in metropolitan areas surrounding cities of more than 500,000 people earn 34% more than workers who live outside metropolitan areas, and 11% percent more than those who live in metropolitan areas with smaller central cities. Within metropolitan areas, on average, individuals who work within the central city earn 17% more than those who work beyond the city limits.
New migrants to cities experience less than a 1% wage gain from their move. But after 5 years, those workers are earning over 10% more than similar workers who stayed in rural areas.
The National Longitudinal Survey of Youth tells us that young urban dwellers have significantly higher IQ scores on average than young people living in rural areas.
In 1950, 34% of US workers had manufacturing jobs; by 1990 this proportion had declined to 17%.
José Scheinkman, Andrei Shleifer, & Edward L. Glaeser found that every 20% increment in a city’s 1960 concentration of employment in manufacturing corresponded with a 16% decrease in population between 1960 and 1990. That same 20% increase in dependence on manufacturing in 1960 led to a 50% decline in manufacturing employment and a 13% decline in non-manufacturing employment between 1960 and 1990.
Cities that had a high proportion of college-educated workers in 1960 grew in population over the subsequent 3 decades, while those that didn’t, shrank.
Between 1950 and 1970, one additional year of schooling on average in a city increased its growth rate by 3.8%. For the 1970 to 1990 period, that figure soared to 8.1%.
James Rauch and David Maré have both marshaled overwhelming evidence that higher average education levels in a city translate into higher wages for everyone — not just the well-educated themselves.
Glaeser, Scheinkman, Shleifer and Hédi Kallal found that as the concentration of employment in a given city’s largest 5 industries fell by 10% — that is, as the city’s economy became more diverse — that city’s rate of growth in employment rose by 9% between 1960 and 1990.
According to the US Bureau of Labor Statistics, male college graduates’ earnings advantage over male high school graduates doubled from 37% in 1979 to 74% in 1992.