Spatial economic disparities across the United States

Abstract

The thesis deals with spatial economic disparities in the United States.

The first chapter, “The Evolution of Income Disparities across US Metropolitan Statistical Areas”, investigates how the spatial evolution of core-based city regions affects the dynamics of income disparities across Metropolitan Statistical Areas in the United States between 1971 and 2010. Treating initially nonmetropolitan counties as part of the functional economic system for the whole time period changes the internal composition of average per capita personal income thus biasing convergence analysis. The paper analyses the dynamics of the cross-sectional distribution of per capita personal income by comparing different methods to define MSAs over time. The results show that a cluster of high income economies emerges when MSAs are allowed to evolve spatially.

The second chapter, “Urban governance Structure and Wage Disparities among US Metropolitan Areas”, analyses the determinants of spatial wage disparities in the US context for the period 1980-2000. Agglomeration benefits are estimated based on city productivity premia which are computed after controlling for the skills distribution among metropolitan areas as well as industry fixed effects. The drivers of productivity differentials that are taken into consideration are the size of the local economy, the spatial interactions among local autonomous economic systems and the structure of urban governance as well as the policy responses to the fragmentation issue. A metropolitan area with ten percentage more administrative units than another of the same size, experiences wages that are between 2:0% and 3:0% lower. The presence of a voluntary governance body is found to mitigate the problem of fragmentation only marginally, while the existence of special purpose districts have a negative impact on regional productivity. The implementation of a metropolitan government with a regional tax system is expected to increase productivity by around 6%.

Finally, the third chapter, “The effect of immigration on convergence dynamics in the US”, studies the impact of immigration on the dynamics of the cross-sectional distribution of GSP per capita and per worker. To achieve this aim, we combine different approaches: on the one hand, we establish via Instrumental Variable estimation the effect of the inflow of foreign-born workers on output per worker, employment and population; on the other hand, using the Distribution Dynamics approach, we reconstruct the consequences of migration flows on convergence dynamics across US states.