Urban Revival in America, 2000 to 2010

81 Pages Posted: 6 Dec 2017 Last revised: 23 Oct 2021

See all articles by Victor Couture

Victor Couture

University of California, Berkeley

Jessie Handbury

University of Pennsylvania, The Wharton School

Date Written: November 2017

Abstract

This paper documents and explains the striking rise in the proclivity of college-educated individuals to reside near city centers since 2000. We show that this recent urban revival is driven almost entirely by younger college graduates in larger cities. With a residential choice model, we quantify the role of jobs, amenities, and house prices in explaining this trend. We find that the rising taste of young college graduates for non-tradable service amenities like restaurants and nightlife accounts for more than 40 percent of their movement toward city centers. Complementary data shows a corresponding rise in young college graduate expenditures on and trips to non-tradable services. We then link changes in both consumption and urbanization to secular trends of top income growth and delayed family formation amongst young college graduates.

Suggested Citation

Couture, Victor and Handbury, Jessie, Urban Revival in America, 2000 to 2010 (November 2017). NBER Working Paper No. w24084, Available at SSRN: https://ssrn.com/abstract=3082267

Victor Couture (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

Jessie Handbury

University of Pennsylvania, The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104
United States

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