From John Lindsay to Rudy Giuliani: the decline of the local safety net?

This paper was presented at the conference "Unequal incomes, unequal outcomes? Economic inequality and measures of well-being" as part of session 4, "Economic inequality and local public services." The conference was held at the Federal Reserve Bank of New York on May 7, 1999. The authors contend that the future scope of city-based redistributive policies is limited. An important way in which policymakers work to reduce inequality is by redistributing income from the wealthy to the poor, channeling income tax revenue into spending on welfare and other services. The authors suggest, however, that New York City and other cities have had to scale back their redistributive policies. New York City's evolution from a manufacturing city to a service city accounts for more than one-third of the reduction in redistribution, because businesses in the service sector are more mobile and are therefore harder to tax than those in manufacturing. In addition, the authors document a more general decline in the relationship between land area and redistribution. In 1970, cities with greater land area tended to redistribute more income, but by 1990, this connection was no longer evident. The authors attribute this change to an erosion in the market power of large cities and observe that increased mobility and the existence of edge cities have contributed to a decline in the monopoly power once enjoyed by large cities.Public policy ; Public welfare ; Income distribution ; Income

Decentralized Employment and the Transformation of the American City

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 time 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.

Power Couples: Changes in the Locational Choice of the College Educated, 1940-1990

The rise of the dual career household is a recent phenomenon spurred by the increase in married women's labor force participation rates and educational attainment rates. Compared to traditional households these households must solve a colocation problem. This paper documents trends in locational choice between large and small metropolitan areas and non-metropolitan areas by household type from 1940 to 1990. We find that college educated couples are increasingly concentrated in large metropolitan areas and attribute at least half of this increase to the growing severity of the colocation problem. We also find that the relative returns for a college-educated couple of being in a large relative to a small city have increased across decades. Our results suggest that because skilled professionals are increasingly bundled with an equally skilled spouse, smaller cities may experience reduced inflows of human capital relative to the past and therefore become poorer. We examine how the relationship between rankings of university graduate programs and city size has changed between 1970 and 1990 to provide suggestive evidence on the importance of city size to firms' ability to attract the best workers.

Shame and Ostracism: Union Army Deserters Leave Home

During the Civil War not all men served honorably and this was known by everyone in their communities. We study how shame and ostracism affect behavior by examining whether men who deserted from the Union Army, and who faced no legal sanctions once the war was over, returned home or whether they moved and re-invented themselves. We build a unique panel data set that provides us with a control group for deserters because we can identify men who deserted but then returned to fight with their companies. We find that, compared to non-deserters and returned deserters, deserters were more likely to move both out of state and further distances. This effect was stronger for deserters from pro-war communities. When deserters moved they were more likely to move to anti-war states than non-deserters. Our study provides a rare test of the empirical implications of emotion. While both shame and ostracism would push deserters out of their home community, we find no evidence that deserters faced economic sanctions.

Understanding the Decline in Social Capital, 1952-1998

We evaluate trends in social capital since 1952 and assess explanations for the observed declines. We examine both social capital centered in the community and in the home and argue that the decline in social capital has been over-stated. Controlling for education, there have been small declines in the probability of volunteering, larger declines in group membership, and still larger declines in the probability of entertaining since the 1970s. There have been no declines in the probability of spending frequent evenings with friends or relatives, but there have been decreases in daily visits with friends or relatives. Rising community heterogeneity (particularly income inequality) explains the fall in social capital produced outside the home whereas the rise in women's labor force participation rates explains the decline in social capital produced within the home.

Sprawl and Urban Growth

Cities can be thought of as the absence of physical space between people and firms. As such, they exist to eliminate transportation costs for goods, people and ideas and transportation technologies dictate urban form. In the 21st century, the dominant form of city living is based on the automobile and this form is sometimes called sprawl. In this essay, we document that sprawl is ubiquitous and that it is continuing to expand. Using a variety of evidence, we argue that sprawl is not the result of explicit government policies or bad urban planning, but rather the inexorable product of car-based living. Sprawl has been associated with significant improvements in quality of living, and the environmental impacts of sprawl have been offset by technological change. Finally, we suggest that the primary social problem associated with sprawl is the fact that some people are left behind because they do not earn enough to afford the cars that this form of living requires.

Changes in the Value of Life: 1940-1980

We present the first nation wide value of life estimates for the United States at more than one point in time. Our estimates are for every ten years between 1940 and 1980, a period when declines in fatal accident rates were historically unprecedented. Our estimated elasticity of value of life with respect to per capita GNP is 1.5 to 1.7. We illustrate the importance of rising value of life for policy evaluation by examining the benefits of improved longevity since 1900, showing that the current marginal increase in longevity is more valuable than the large increase in the first half of the twentieth century.

Forging a New Identity: The Costs and Benefits of Diversity in Civil War Combat Units for Black Slaves and Freemen

By the end of the Civil War, 186,017 black men had fought for the Union Army and roughly three-quarters of these men were former slaves. Because most of the black soldiers who served were illiterate farm workers, the war exposed them to a much broader world. The war experience of these men depended upon their peers, their commanding officers, and where their regiment toured. These factors affected the later life outcomes of black slaves and freemen. This paper documents both the short run costs and long run benefits of participating in a diverse environment. In the short run the combat unit benefited from company homogeneity as this built social capital and minimized shirking, but in the long run men's human capital and aquisition of information was best served by fighting in heterogeneous companies.