Aging Nations and the Future of Cities

30 Pages Posted: 8 Sep 2009

See all articles by Carl Gaigne

Carl Gaigne

French National Institute for Agricultural Research (INRA) - UMR 1302 SMART

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Date Written: August 2009

Abstract

We investigate whether an aging population may challenge the supremacy of large working-cities. To this end, we develop an economic geography model with two types of individuals (workers and retirees) and two sectors (local services and manufacturing). Workers produce and consume; the elderly consume only. As a result, the mobility decision of workers is driven by both the wage gap and the cost-of-living gap, unlike the elderly who react to the differences in the cost of living only. We show that the return of pre-industrial urban system dominated by rentier cities does not seem to be on the agenda. Quite the opposite, the future of large working-cities is still bright, the reason being that today’s urban costs act as a strong force that prevents a large share of local services and manufacturing firms from following the rentiers in the elderly-cities, while the supply of differentiated b2c services prevent their complete separation.

Keywords: aging population, commuting costs, economic geography, sectoral mobility, spatial mobility

JEL Classification: F12, F16, J60, L13, R12

Suggested Citation

Gaigne, Carl and Thisse, Jacques-François, Aging Nations and the Future of Cities (August 2009). CEPR Discussion Paper No. DP7403. Available at SSRN: https://ssrn.com/abstract=1469902

Carl Gaigne

French National Institute for Agricultural Research (INRA) - UMR 1302 SMART ( email )

4 allée Adolphe Bobierre
CS 61103
Rennes Cedex, 35011
France

Jacques-François Thisse (Contact Author)

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
3
Abstract Views
235
PlumX Metrics