Decentralized Employment and the Transformation of the American City

69 Pages Posted: 9 Feb 2001 Last revised: 21 Oct 2010

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Matthew E. Kahn

University of Southern California; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: February 2001

Abstract

This paper examines the decentralization of employment using zip code data on employment by industry. Most American cities are decentralized on average less than 16 percent of employment in metropolitan areas is within a three mile radius of the city center. In decentralized cities, the classic stylized facts of urban economics (i.e. prices fall with distance to the city center, commute times rise with distance and poverty falls with distance) no longer hold. Decentralization is most common in manufacturing and least common in services. The human capital level of an industry predicts its centralization, but the dominant factor explaining decentralization is the residential preferences of workers. Political borders also impact employment density which suggests that local government policies significantly influence the location of industry.

Suggested Citation

Glaeser, Edward L. and Kahn, Matthew E., Decentralized Employment and the Transformation of the American City (February 2001). NBER Working Paper No. w8117. Available at SSRN: https://ssrn.com/abstract=259424

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

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Matthew E. Kahn

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