Cities and Growth: In Situ Versus Migratory Human Capital Growth

Abstract

University degree holders in large cities are more prevalent and are growing at a more rapid pace than in smaller cities and rural areas. This relatively high rate of growth stems from net migratory flows and/or higher rates of degree attainment in cities. Using data from the 1996 and 2001 Censuses, this paper tests the relative importance of these two sources of human capital growth by decomposing degree-holder growth across cities into net migratory flows (domestic and foreign) and in situ growth: that is, growth resulting from higher rates of degree attainment among the resident populations of cities. We find that both sources are important, with in situ growth being the more dominant force. Hence, it is less the ability of cities to attract human capital than their ability to generate it that underlies the high rates of degree attainment we observe across city populations.

Keywords: human capital, degree holders, urban economic growth, regional income disparities

JEL Classification: J24, R1, R23