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Which Places Are Growing? Seven Notable Trends from Newly Released Census Data by Edward L

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Which Places Are Growing? Seven Notable Trends from Newly Released Census Data by Edward L March 2011 Which Places Are Growing? Seven Notable Trends from Newly Released Census Data By Edward L. Glaeser (Harvard University) Each new Census provides us with deliver higher wages. Rappaport Institute/Taubman Center a picture of our changing United 2. January temperature continues Policy Briefs are short overviews of new and States. We have been a nation in notable research on key issues by scholars to be a strong predictor of affi liated with the Institute and the Center. fl ux for almost four centuries, as population growth. This fact Edward L. Glaeser populations have moved over space— refl ects both a natural affi nity for Edward L. Glaeser is the Fred and Eleanor fi rst populating the less dense areas Glimp Professor of Economics at Harvard warmth, and also the tendency of University. He also is the Director of the th of the country, and then in the 20 many Sunbelt areas to have fewer Rappaport Institute for Greater Boston and century, moving to sun, sprawl and the Taubman Center for State and Local barriers to building. Government, which are both housed in the highly productive metropolitan Harvard’s Kennedy School of Government. areas of the coast. The 2010 Census 3. Population growth was faster He is the author of Triumph of the City: th How Our Greatest Invention Makes Us confi rms many of the trends that have near ports. While 19 century Richer, Smarter, Greener, Healthier, and Happier (Penguin Press, 2011). been occurring for decades, but there Americans populated the st are also some breaks with the past. In American hinterland, 21 century © 2011 by the President and Fellows of Americans are moving to the Harvard College. The contents refl ect the some cases, public policies are playing views of the author (who is responsible country’s periphery. for the facts and accuracy of the research a major role in shaping America and herein) and do not represent the offi cial not all of those policies are benign. 4. People are moving to dense areas, views or policies of the Rappaport Institute or the Taubman Center for State and Local In those cases, the Census provides a but not the densest areas. Despite Government. wake-up call about the governing of the decline in transportation costs, America. people are still disproportionately Rappaport Institute for Greater Boston Harvard Kennedy School This report is a brief overview of moving to places that had 79 John F. Kennedy Street Cambridge, MA 02138 major trends in the county level higher density levels as of 2000, responding to the enormous http://www.rappaportinstitute.org population data that were released 617-495-5091 on March 24, 2011. A more complete productivity advantages associated analysis of the data will take more with proximity. A. Alfred Taubman Center for State and Local Government time and this brief should be seen as 5. The education level of a county Harvard Kennedy School a fi rst pass at categorizing population as of 2000 strongly predicts 79 John F. Kennedy Street Cambridge, MA 02138 changes. Many of the trends discussed population growth over the last http://www.hks.harvard.edu/taubman here are discussed at greater length in decade. Again, this trend refl ects 617-495-5140 my book Triumph of the City. the tendency of skilled areas to This policy brief summarizes seven generate far higher incomes. major facts about U.S. county-level 6. Manufacturing employment population growth: predicts lower population 1. Population growth was much growth. While manufacturing higher in counties with higher has predicted urban decline for incomes as of 2000. Americans decades, the connection between unsurprisingly moved to areas that manufacturing and lower levels of Which Places Are Growing? Rappaport Institute | Taubman Center POLICY BRIEFS growth across all U.S. counties is a more a wealthier nation would put less priority on recent phenomenon. material concerns, but that does not seem to be 7. Limits to housing supply that come from true when it comes to migration. What could be either nature or regulation will also limit more natural then people leaving poorer areas population growth. The most expensive and moving to more prosperous areas? areas have not grown all that much and the Many of the facts that follow refl ect this areas that have grown most demonstrably general trend of people following prosperity. are not that expensive. The correlation between population growth and many area attributes, such as density and skills, Trend # 1: Money Matters largely refl ects the connection between these There should be little surprise that Americans attributes and higher incomes. In a sense, the are following the money and moving to areas bigger puzzle appears in those areas, including that pay more. Figure 1 shows the dramatic greater Boston and coastal California, where correlation between county median incomes, as incomes are enormously high, but population of 2000, and population growth between 2000 growth is reasonably modest. and 2010. In the poorest 40 percent of counties, This strong correlation does pose a challenge population growth is typically negative or very to policies that are aimed at disproportionately small. In the richest 20 percent of counties, increasing incomes in poorer areas, such as the population growth averages almost fi fteen Appalachian Regional Commission. Americans percent. seem to be quite good at moving from poor to This relationship is not new. Glaeser and rich places, and this process enhances national Shapiro (2003) illustrate a similar connection productivity by ensuring that people are across metropolitan areas during the 1990s. working in the areas where their labor produces Glaeser, Ponzetto and Tobio (2011) fi nd that the highest returns. If public policy attempts to median income in 1950 strongly predicts equalize regional incomes, it is leaning against county population growth between 1950 this trend, and perhaps inadvertently keeping and 2000. It might have been expected that people in less productive areas. Figure 1: Average Population Growth by Median Income in 2000 (Quintiles) 2 Which Places Are Growing? Rappaport Institute | Taubman Center POLICY BRIEFS Trend # 2: The Sunbelt Continues to Grow to have signifi cantly attracted new industry (Holmes, 1998). Indeed, one can quite plausibly Figure 2 shows county-level population growth argue that the South had far worse institutions by January temperature. The warmest 40 for economic growth before the Civil Rights percent of counties have average population Era, but that today, fewer regulations and lower growth over eight percent. The coldest 40 taxes makes the Sunbelt more pro-growth. percent of counties have average population growth under 3 percent. Perhaps the most important regulations that impact growth are those that impact This trend is certainly not new. For decades, the construction of new homes. Across January temperature has been a powerful metropolitan areas, the growth of population predictor of area growth (Glaeser and Tobio, is tightly tied to the growth of housing supply 2008). One part of this growth surely refl ects and to the rules that impact new construction transportation cost improvements that freed (Glaeser, Gyourko and Saks, 2005). Relatively fi rms from having to cluster around the few limits on new construction make it easier waterways of the Great Lakes System and the to provide abundant new housing in places railroads that followed them. Another part of like Atlanta, Dallas, and Houston and that this expansion refl ects technological changes, has been one reason for those metropolitan like the air conditioner, that made hot summers areas’ million-plus person growth since 2000 more pleasant. (Glaeser and Tobio, 2007). One key piece of But the connection between January evidence suggesting the importance of elastic temperature and growth refl ects more than housing supply for the growth of these areas is just the weather. Sixty years ago, income and that prices in these areas remain low, despite productivity in the South lagged signifi cantly enormous population growth. The standard below that in Northern states. There has been tools of basic economics teach us that the a remarkable convergence of incomes since combination of low prices and enormous then, as manufacturing fi rms moved to lower quantities typically means abundant supply. wage areas that gradually became higher wage. Right-to-Work laws in Southern states seem Figure 2: Average Population Growth by Average January Temperature (Quintiles) 3 Which Places Are Growing? Rappaport Institute | Taubman Center POLICY BRIEFS Trend # 3: America is Moving to its Coasts Franklin Counties, which are in the western part of the state, lost population. Similarly, During the 19th century, Americans by northeastern Virginia is adding population at the millions moved away from the Eastern a rapid clip, while the state’s rural hinterlands Seaboard and populated the nation’s hinterland are depopulating. In Texas, Houston, Austin (Glaeser, Ponzetto and Tobio, 2011). In recent and Dallas continue to explode but many more decades, the population has again been pulled inland counties lost population. towards the old ports and seacoasts (Rappaport and Sachs, 2007). Figure 3 shows the strong The 19th century push inwards refl ected the connection between proximity to either a enormous value of matching people with coastal or inland port and population growth rich farmland and other natural resources. between 2000 and 2010. Counties closest to American productivity was greatly enhanced ports grew by almost 8 percent while those when farmers could work the rich soil of Iowa. farthest from ports grew by less than 3 percent. But the share of labor in agriculture has been declining steadily, and most natural resources This growth does not refl ect people working are relatively easy to ship. We work in an on the docks and it does not refl ect the economy where new ideas generate prosperity importance of water-borne trade.
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