Cities Fail to Generate Upward Mobility, Urban Economist Says

Harvard economist Edward Glaeser has built a career studying population density and wealth. The scholar says cities aren’t delivering opportunity for the poor, especially children.

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“Why has urban success been accompanied by so much discontent?” asks Harvard economist Edward Glaeser. In a new paper, the preeminent authority on urban growth has consistent answers:

Cities aren’t helping poor people become rich, their governments aren’t solving problems, and the cost and congestion of living there have become prohibitive.

Glaeser is not a city basher. He’s built his career by showing how dense metro areas have grown rich because they are the most economically productive places on earth.

And for much of the past 30 or 40 years, these metro areas have pulled people in, giving many a chance to earn more and to build wealth.

More recently, however, these booming metro areas have “failed to generate upward mobility.” Poor people who live in dense metro areas or who move there aren’t moving up the economic ladder. Less skilled people once earned more when they moved to cities and their children had better opportunities. That, Glaeser writes, is no longer true.

It’s a startling admission from Glaeser. But the evidence is clear. Another Harvard economist, Raj Chetty, has shown that poor kids growing up in the nation’s most vibrant, creative cities don’t experience upward mobility. In less dense, often rural areas, poor kids do move up, earning more than their parents and more than the national average.

(Yonder readers may remember our reports on these studies. Here is one of our stories.)

Simply, the denser the urban area, the higher the wages for those with the most education. But the more populated the city, the less likely poor children are to do better economically when they grow up.

Historically, Glaeser writes, “cities have been an escape route for the underemployed residents of rural areas,” such as African Americans or Appalachians who moved to cities in the last century. But since 1980, that kind of migration has slowed, as cities have provided less advantage to the poor.

In fact, according to Chetty, cities are a disadvantage for poor kids.

Glaeser has several explanations. Cities “abet racial and income segregation,” perhaps. Children are often left alone by parents who go outside the home to find all the things cities have to offer. Left alone, children may get into trouble. Indeed, Chetty finds that poor children who grow up in rural areas have lower rates of incarceration than poor children who are reared in the cities.

Most important, Glaeser writes, “cities have provided riches for their most skilled and luckiest inhabitants…(but) have done less well providing employment opportunities for the less fortunate.”

Entrepreneurs like Henry Ford once created industries that provided jobs that moved less skilled workers into the middle class. Today’s business entrepreneurs — Mark Zuckerberg and Sergey Brin – have built industries that boost those with specialized skills.

The Harvard economists makes a list of the problems, and most of them have to do with local government. Housing prices are inflated because regulations and neighborhood opposition prevent new homes from being built. Schools are failures. Governments over-regulate new businesses. Roads are congested.

Cities once solved their problems, Glaeser writes. Modern sewage and water systems are examples of city success. Crime, for a while, was controlled.

But city governments have squandered even these gains, as infrastructure collapses and crime rates in some cities rise. And road congestion gets worse every year.

“Urban discontent today does not reflect a failure of the economic city,” Glaeser concludes, “but rather the shortcomings of the political city.”

There is one city shortcoming that Glaeser ignores. Chetty’s research found that places with more “social capital” were better for poor children. Children who grew up in strong communities – with lots of volunteering, civic organization, where people talked with each other – earned more as adults. In Glaeser’s terms, social capital created high mobility.

Rural places have more social capital than central cities. As a result, “rural areas produce better outcomes,” said Harvard’s Nate Hendren, one of Chetty’s colleagues.

Cities once substituted opportunity for community. Now, even that trade isn’t breaking even.

I can see the consequences on my street near the center of a town of 4,800. Young families have bought four houses nearby. They are refugees from Houston and Austin. They like knowing their neighbors. They share their children. They love the schools. They feel at home.

They found something they never experienced in the state’s huge central cities. And the research says, their children will benefit for the rest of their lives.

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