What Happened to and in Detroit?

29 Pages Posted: 26 Oct 2013

See all articles by John F. McDonald

John F. McDonald

University of Illinois at Chicago

Date Written: October 24, 2013

Abstract

The paper describes the fiscal status of the City of Detroit, leading up to its filing for bankruptcy on July 18, 2013. Then the economic history of metropolitan Detroit and the city of Detroit from 1950 to the present is examined in an effort to answer these questions. Why did Detroit file for bankruptcy - and not some other major city? And why now and not earlier? The paper concludes that, while Detroit and several other cities in the northeastern region suffered major population and employment losses and went through a long period of urban crisis between roughly 1970 and 1990, the severity of Detroit's problems compared to other cities did not emerge until the most recent decade. Population and employment losses during the 2000-2010 decade were much worse in the city of Detroit than in the other major central cities in the Northeast. These problems produced collapse in real estate markets, a high poverty rate and a drastic decline in median family income, worsening social problems, and declining tax revenues for the City. Detroit suffered a vicious circle of decline in the most recent decade that exceeded the experiences of other cities.

Keywords: Detroit, bankruptcy, urban decline

JEL Classification: R11, R51

Suggested Citation

McDonald, John F., What Happened to and in Detroit? (October 24, 2013). Available at SSRN: https://ssrn.com/abstract=2344832 or http://dx.doi.org/10.2139/ssrn.2344832

John F. McDonald (Contact Author)

University of Illinois at Chicago ( email )

Chicago, IL 60605
United States
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