Urban-Biased Growth: A Macroeconomic Analysis

Fabian Eckert, Sharat Ganapati and Conor Walsh

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: After 1980, larger US cities experienced substantially faster wage growth than smaller ones. We show that this urban bias mainly reflected wage growth at large Business Services firms. These firms stand out through their high per-worker expenditure on information technology and disproportionate presence in big cities. We introduce a spatial model of investment-specific technical change that can rationalize these patterns. Using the model as an accounting framework, we find that the observed decline in the investment price of information technology capital explains most urban-biased growth by raising the profits of large Business Services firms in big cities.

Keywords: Urban Growth; High-skill Services; Technological Change (search for similar items in EconPapers)
JEL-codes: J31 O33 R11 R12 (search for similar items in EconPapers)
Pages: 95 pages
Date: 2024-06
New Economics Papers: this item is included in nep-geo, nep-ict, nep-lma and nep-ure
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Downloads: (external link)
https://www2.census.gov/library/working-papers/2024/adrm/ces/CES-WP-24-33.pdf First version, 2024 (application/pdf)

Related works:
Working Paper: Urban-Biased Growth: A Macroeconomic Analysis (2022)
Working Paper: Urban-Biased Growth: A Macroeconomic Analysis (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:24-33

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